Air cargo: IATA says Middle East and North Africa show promise

For 2010, IATA is forecasting a bottom line improvement of $1 billion on the $600 million that the region’s carriers lost in 2009.

By ·

The International Air Transport Association (IATA) called for coordinated efforts to deal with the challenges of growth in the Middle East and North Africa (MENA).

“Over the last decade, the carriers of the Middle East and North African region have grown from 5 percent of global traffic to 11 percent,” said Giovanni Bisignani, IATA’s Director General and CEO. “Planned aircraft purchases of $200 billion over the next decade will support this growth into the foreseeable future. This expanding global presence brings with it the challenge of playing a larger role in the global aviation community,” said.

The financial situation of the MENA carriers is improving. For 2010, IATA is forecasting a bottom line improvement of $1 billion on the $600 million that the region’s carriers lost in 2009. “We are expecting the region to make $400 million profits this year. A more cautious approach to capacity is helping to drive this improvement. While demand is in line for a 21 percent increase over last year, the capacity increase has been limited to 15.9 percent,” said Bisignani in a keynote address to the Arab Air Carriers Organization (AACO) Annual General Meeting in Cairo, Egypt.

Luciana Suran, an economist with CB Richard Ellis Economic Advisors, noted that air cargo is ramping up for U.S. multinationals in a number of emerging nations.

“Even though it may be more expensive in the short term, many companies will absorb that for velocity benefits,” she said at the recently-concluded Supply Chain Executive Summit in Houston.

For 2011, IATA expects a fall in global profitability to $5.3 billion from the $8.9 billion that airlines are expected to make in 2010. IATA expects MENA carriers to follow the trend with a reduced 2011 regional profit of $300 million. The small profit will be partially driven by an expected capacity expansion of 10.6 percent outstripping demand growth of 10.4 percent.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Unlock the Value of Your Supply Chain Through Embedded Analytics
Learn how embedded analytics can provide deeper supply chain intelligence and help you extract maximum value from data for your supply chain operations
Download Today!
From the May 2017 Issue
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management, but what sort of technologies fall under these broad terms, and how will they change the management capabilities at our disposal? To find out, we talked to some noted supply chain analysts, consultants and technology executives and gathered six digital trends to watch.
Transportation Trends and Best Practices: The Battle for the Last Mile
2017 Technology Roundtable: Are we closer to “Intelligent” Logistics?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Going Beyond Rate Negotiations for Logistics Cost Savings
The pressure to reduce cost is a fundamental part of every organization today leaving many supply chain professionals constantly renegotiating rates. This webcast examines four areas that may hold untapped savings potentials and even help organizations negotiate better rates.
Register Today!
EDITORS' PICKS
The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...

LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...