Middle East Airlines’ profits have reportedly been declining by USD6 million per month since Oct-2009, due to increased competition (The Daily Star, 22-Mar-2010). Middle East Airlines reported profits reached USD105 million in 2009. Meanwhile, Middle East Airlines Chairman, Mohammad Hout, wrote to the Prime Minister, Saad Hariri, warning of the consequences the national carrier faces if a "fair and controlled" open skies policy in Lebanon is not implemented, adding the capacity in Beirut has reached the limit. [more - Perspective]
Middle East Airlines profits falling by USD6 million per month due to rising competition
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CAPA global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn. CAPA’s global airline operating margin model indicates that the industry was more profitable in 2015 than it has been for almost five decades. Moreover, the model predicts that world airline operating margins will rise further above previous historic peak levels in 2016. These new levels of profitability are mainly thanks to the low oil price environment, coupled with strong demand growth in spite of global economic growth rates that are far from exceptional.
Much of the industry is also benefiting from a period of relative capacity discipline. New revenue sources may also be helping, although their role in airline profitability is still emerging.
The macroeconomic and geopolitical backdrops provide the main risks to this forecast. Beyond that, the biggest challenge for the industry will then be to try to sustain margin levels, rather than to allow a peak to be followed by a rapid downturn, as has always happened in the past. But downturns can play a positive role in industry development, possibly even stimulating consolidation.
Global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn