Airlines based in the Middle East and Africa will end the year in the black, despite macroeconomic headwinds, as air travel demand outstrips available seat capacity, the International Air Transport Association's regional chief said.
Passenger traffic has reached 80 per cent of 2019 levels before Covid-19, lifting revenue and pushing operators into profitability, Kamil Al-Awadhi, regional vice president for Africa and the Middle East at Iata, told The National on the sidelines of the Bahrain International Airshow.
“To be quite frank, I'm quite proud of them. Having run an airline myself, I know how complicated it is on a normal day, without all these variables and uncertainty and lack of visibility,” Mr Al-Awadhi, the former chief executive of Kuwait Airways, said.
“Where they're at right now is evidence that they've done a good job in surviving on their own predominantly.”
“When it comes to revenue, it will be positive for the airlines because as the demand outstrips the supply, they're reaping some of the cash that compensates some of the losses.
“It doesn't compensate their losses from 2020 and 2021, but at least it keeps them afloat, adds some cash for them to recover some issues like routes that they shut down, aircraft they parked and maintenance they suspended.
“They will return to the black for this fiscal year, not overall, that will take a few years to recover the losses they've had in 2020-2021.
“In 2022, they will probably make a better profit than 2019, but that doesn't cover the losses made in 2020 and 2021.”
This is because demand in 2019 was lower than the available seat capacity, whereas in 2022, there is higher travel demand and fewer seats, which drives up the air fare and the airlines make more profit per flight, Mr Al-Awadhi said.