March 12- The air travel industry in the Middle East expects to suffer losses of $400 million this year, as there has been low yields on long flights, thus reducing the profit margin, said the International Air Transport Association (IATA) on Thursday.
The IATA also said that the price of fuel will keep increasing and the average oil price will rise from $75 to $79 per barrel, a $ 17 per barrel rise on the $62 average price in 2009. Fuel is expected to make up an average of 26 per cent of operating costs this year.
“Revenues are half-way to recovery— $42bn below the 2008 peak and $43bn above the 2009 trough. Important fundamentals are moving in the right direction. Demand is improving. The industry has been wise in managing capacity. Prices are beginning to align with the costs—premium travel aside. We can be optimistic but with due caution. Important risks remain. Oil is a wild-card, over-capacity is still a danger, and costs must be kept under control—throughout the value chain and with labour,” said Giovanni Bisignani, IATA’s Director General and CEO.
