The recent political instability has left aviation partners concerned about their profitability outlook including the possibility of delayed aircraft orders in the region.
The Qatar-Gulf rift disrupted airlines and airspace hours before IATA announced that Middle East airlines would lose nearly two-thirds in profits over a turbulent 2017, causing the association’s director general, Alexandre de Juniac to acknowledge the expectations for future earnings could be even worse in the region.
“The extent to which they will have an effect is unpredictable right now,” he said on Monday at IATA’s 73rd annual general meeting in Mexico. “It came as a surprise to all of us,” he said.
Aircraft manufacturers and engine makers were already wondering whether airlines in the Middle East would delay accepting orders they had placed well before IATA announced its 2017 projections.
Qatar has 110 mid- to long-haul aircraft orders pending delivery from Airbus and 104 from Boeing; Emirates has 171 orders from Boeing and 94 from Airbus; Etihad has 85 aircraft orders with Boeing and a further 83 with Airbus.
Ahead of the Paris Airshow later this month, Airbus’ CEO Tom Enders told journalists at an earnings call that 13 percent of the company’s orders were to be delivered to the Middle East and last week that he “nobody could rule out consolidation in the long-term.”
“We are far from being overexposed to the region, but any disruption in any mature region or market is relevant for us is a reason for concern. We sincerely hope that these disruptions are not developing to a long-term conflict,” he said.
Boeing on the other hand might still weather the storm better than its competitors in the Gulf after signing billions in landmark deals with Saudi Arabia during US President Trump’s visit to the country last month.
