Shifting Sands – an update on latest developments across the Middle East

The Middle East market has been a story of growth for so many recent years as the development strategies from the likes of Emirates Airline, Etihad Airways and Qatar Airways has firmly placed the Gulf region on global route maps. But things have got more challenging. Political interference has become a norm, airline strategies have been called to attention and flights have actually been banned between some neighbouring nations across the region.

Our regular round-up delivers some of the latest key aviation and travel news stories from across the Middle East region.

Air Arabia: Growth prospects remain strong for MENA region, especially ‘low cost travel segment’

Air Arabia chairman Sheikh Abdullah Bin Mohamed Al Thani stated: “Growth prospects for the MENA region remain strong for the aviation industry and especially for the low cost travel segment”. Mr Al Thani added for the remainder of 2019 the carrier plans to “continue to focus on expanding its geographic reach, driving cost control measures” and further investing in its “value driven product offering”.

‘Shifting attitude’ of Gulf carriers ‘one of the biggest changes’

Citi analyst industrials & transport Jakob Cakarnis, speaking at the CAPA Australia Pacific Aviation & Corporate Travel Summit last week stated “one of the biggest changes we have seen is a shifting attitude by the gulf carriers”. Mr Cakarnis noted: “Gulf carriers have underwritten on fuel costs… which makes them intensive on competition… their south facing capacity has shifted north”. Mr Cakarnis attributed the shift to levelled capacity growth by Gulf carriers and the “discipline” by North Asian carriers.

Etihad Airways signs partnership with Winding Tree

Winding Tree confirmed (09-Aug-2019) Etihad Airways will adopt the company’s open source travel distribution platform to explore opportunities for seamless distribution of its products and services. Etihad Aviation Group CCO Robin Kamark stated by leveraging on the Winding Tree platform, Etihad expand its product offering and reach for its passengers.

Air Arabia records 75% increase in net profit for 2Q2019; 47% increase for 1H2019

Air Arabia reported a net profit of AED210 million (USD57.1 million) for 2Q2019, an increase of 75% year-on-year. The company’s turnover grew by +22% to AED1.144 billion (USD311.5 million). Air Arabia chairman Sheikh Abdullah Bin Mohamed Al Thani stated these results were driven by “cost control measures, improved yield margins and strong passenger demand”. For 1H2019, it reported  a net profit of AED338 million (USD92 million), an increase of +47% year-on-year. The company’s turnover grew by +20% to AED2.173 billion (USD591.6 million). Air Arabia chairman Sheikh Abdullah Bin Mohamed Al Thani stated the global and regional aviation industry was impacted by “pressing economic challenges and geo-political tensions in 1H2019” yet despite that, Air Arabia registered a record performance supported by “strong passenger demand, momentum growth and operational efficiency”.

Saudi GACA and Transport General Authority sign agreement for airport public transport

Saudi Arabia General Authority of Civil Aviation (GACA) and Saudi Arabia’s Transport General Authority signed a cooperation agreement regarding the development of public transportation services for the nation’s airports. The authorities will deploy the services at Jeddah King Abdulaziz International airport first with the arrival of the Al-Haramain starting from Oct-2019.

All change – Tehran airport transfers international operations of six airlines to Salaam Terminal

Tehran Imam Khomeini Airport Company transferred the operations of Azerbaijan Airlines and Salam Air to the new Salaam Terminal at Tehran Imam Khomeini International airport, effective 08-Aug-2019, followed by those of Iraqi Airways on 12-Aug-2019. It will continue the process with the flights of Bravo Airways from 16-Aug-2019, Iran Aseman Airlines from 22-Aug-2019 and Armenia Airways from 28-Aug-2019.

News Briefs

  • Dubai International airport handled 41.28 million passengers in 1H2019, a 5.6% decrease year-on-year. The airport reported 178,383 total flights, down 11.6% The airport attributed this to the runway rehabilitation closure between 16-Apr-2019 and 30-May-2019. Wait times decreased 25% and baggage volume decreased 3.9%.
  • Jazeera Airways reported eCommerce sales increased by +13.2% year-on-year in 1H2019, while ancillary revenue grew by +25.5%.
  • Emirates Airline has extended its codeshare with UK regional carrier Flybe and will see its ‘EK’ code added to the latter’s Isle of Man-London Heathrow, Isle of Man-Manchester and Newquay-London Heathrow services.
  • Saudia transferred its Abu Dhabi, Bahrain and Muscat services to terminal 1 at Jeddah King Abdulaziz International airport effective from 09-Aug-2019.
  • United Arab Emirates (UAE) and South Korea delegations concluded an air services meeting last week without a consensus on terms for increasing the number of services between the countries. The relevant officials will continue discussions at an as yet detailed date.
  • Bahrain Airport Company (BAC) has announced it is seeking proposals regarding the operation of Bahrain International Airport travel agency services at the airport’s new terminal. BAC is receiving proposals until 04-Sep-2019
  • Travelex has arrived at Ras Al Khaimah International airport in the United Arab Emirates (UAE) after launching two points of access for exchange and transfer operations in the arrival and departure terminals during the first week of Aug-2019.

CAPACITY SNAPSHOT: Middle East Domestic Seats (as at 12-Aug-2019)Source: CAPA – Centre for Aviation and OAG (NOTE: *These values are at least partly predictive up to 6 months ahead and may be subject to change)

Fleet Development

  • Gulf Air reported it will receive its seventh Boeing 787-9 aircraft in 2019, as part of its fleet modernisation programme, which concludes in 2023. As part of the programme, the carrier will receive a total of 39 new aircraft to form a fleet Boeing 787-9, A320neo and A321neo aircraft.
  • Qatar Airways plans to operate Doha-Tokyo Narita service with Boeing 777-300ER instead of A350-1000 equipment, operating between 16-Nov-2019 and 29-Mar-2020. At the same time it will deploy the A350-1000 on its Doha-Cape Town route.
  • Etihad Airways plans to deploy A330-300 equipment on Abu Dhabi-Amman service, effective 05-Nov-2019.

CAPACITY SNAPSHOT: Middle East International Seats (as at 12-Aug-2019)Source: CAPA – Centre for Aviation and OAG (NOTE: *These values are at least partly predictive up to 6 months ahead and may be subject to change)

Route Update

  • Etihad Airways plans to reduce Abu Dhabi-Geneva frequency from seven to five times weekly, operating between 05-Nov-2019 and 02-Dec-2019.
  • IndiGo reportedly plans to increase Hyderabad-Doha frequency from daily to twice daily, commencing 16-Sep-2019. Qatar Airways also operates the route, according to OAG.
  • Qatar Airways plans to increase Doha-Oslo frequency from 10 to 14 times weekly, effective 02-Dec-2019. The carrier plans to operate the route with A350-900 equipment.
  • India’s SpiceXpress plans to commence Delhi-Kabul service and add two freighter aircraft in Aug-2019.
  • Druk Air plans to commence twice weekly Paro-Delhi-Dubai service from 04-Sep-2019. The airline will operate the service with A319 aircraft.