NEW DYNAMICS FOR MIDDLE EAST CARRIERS

After years of exceptional growth and network development, the three largest carriers of the Gulf area are looking at ways to maximise and rationalise their footprint over the global air transport sector.

For years, Emirates, Etihad and Qatar Airways made the headlines with double-digit growth rates, record aircraft command, network expansion and innovative services. They are still growing and ne-tuning their on-board services, but last year marked a shift in the airlines’ destiny. The three airlines reported sinking profits or even losses. Abu Dhabi national carrier Etihad is now embarked into a slimming down exercise of its network while cancelling aircraft orders. Qatar Airways continues its growth but its financial results have been dented by the embargo the carrier faces from its neighbours. Emirates’ announcement to cancel the delivery of the iconic Airbus A380 was symbolic, signing the death-knell of the aircraft’s production.

On the other hand, smaller Gulf carriers were luckier last year. Bahrein-based Gulf Air is being redefined as a boutique carrier while Oman Air is enjoying stable growth as it capitalises on the new Muscat airport and new aircraft. International Air Transport Association IATA observed that, although Middle East carriers’ traffic increased 4.2% in 2018, it was down from 6.9% growth in 2017 and 11.8% in 2016. Capacity climbed 5.2% last year but load factor slipped 0.7 point to 74.7%. Middle-East market share in world air transport is down to 9.2% in 2018 from a high of 9.6% back in 2016.

Passenger demand is shifting. Travellers increasingly want to fly non-stop routes, particularly from secondary destinations with more single-corridor aircraft such as the Airbus A320 neo able to fly extended hours. Qatar Airways and Gulf Air have already acknowledged the trend by putting into service Airbus A320ER aircraft on long haul routes such as Bahrein-Paris for Gulf Air. Emirates Airlines now wants to conquer passengers in secondary destinations and has ditched its order for A380s in favour of smaller airplanes – 40 A330- 900s and 30 A350-900s.

Photo: Bahrein-based Gulf Air is being redefined as a boutique carrier