Qatar Airways and the two other big GCC carriers have a “very strong position” in the market and are “financially very strong” with a solid vision, says IATA director-general and CEO, Tony Tyler.
“Their traffic is not driven by regional demand in the GCC or the Middle Eastern region,” Tyler replied when Gulf Times asked whether the Big Three Gulf carriers would be hit because of the regional economic slowdown on account of lower hydrocarbon prices.
“Qatar Airways and the two other big GCC carriers – Emirates and Etihad - are global super connectors. They take passengers from Brazil to India and from China to the US. Really, you got to look at the global trends if you were to assess them,” Tyler said in an interview at the Royal Dublin Society here.
Equally important, he stressed, is the fact that these Gulf carriers, clearly, have a “very strong position” in the market.
“In terms of cost structures, they have a very powerful hub and spoke operating model,” the outgoing IATA (International Air Transport Association) chief said.
Asked whether the large aircraft orders placed by the three carriers would be impacted because of the regional economic slowdown, Tyler said, “I think, there is bound to be some adjustments in orders… some tweaking here and there. But Qatar Airways and the other two Gulf carriers are financially very strong with a very strong vision on what they are trying to do.
“If I were Boeing or Airbus, I will not be losing sleep over possible aircraft order cancellation from these carriers.”
On the expected profit of $1.6bn for Middle East carriers this year, he said it would be driven mainly by lower oil prices and a robust passenger demand.
“The projected net profit this year is up slightly on the $1.4bn reported for 2015,” Tyler pointed out.
The Middle Eastern capacity, dominated by the Big Three carriers is forecast to grow at 12.2%, outpacing an expected 11.2% expansion of demand.
Tyler said, “Lower oil prices are certainly helping - though tempered by hedging and exchange rates. In fact, we are probably nearing the peak of the positive stimulus from lower prices. Performance, however, is being bolstered by the hard work of airlines. Load factors are at record levels. New value streams are increasing ancillary revenues. And joint ventures and other forms of cooperation are improving efficiency and increasing consumer choice while fostering robust competition. The result- consumers are getting a great deal and investors are finally beginning to see the rewards they deserve.”
The IATA also revised its 2016 financial outlook for global air transport industry profits upwards to $39.4bn (from $36.3bn forecast in December 2015). That is expected to be generated on revenues of $709bn for an aggregate net profit margin of 5.6%.
“2016 is expected to be the fifth consecutive year of improving aggregate industry profits,” Tyler said.
u201cQatar Airways and the two other big GCC carriers are global super connectors. They take passengers from Brazil to India and from China to the USu201d, says IATA director-general and CEO, Tony Tyler.
