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.

Middle East carriers to lose USD6 per passenger in 2019, cargo decline worse than rest of the world

IATA director general and CEO Alexandre de Juniac, in remarks made at the AACO AGM, reported Middle East carriers overall are expected to lose USD5 per passenger in 2019, which is “far below” the global average of USD6 profit per passenger. Mr de Juniac also reported trade tensions are taking their toll on airlines. According to IATA data, cargo volumes “are tracking about 4% below last year and, in the region, nearly 7% below” Mr de Juniac said.

Emirates projects airline industry will continue ‘facing headwinds’ in H2FY2019/20

Emirates chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum projected the airline and travel industry will continue “facing headwinds over the next six months with stiff competition adding downward pressure on margins”. Mr Al Maktoum added going into H2FY2019/20, the Group plans to continue investing in “new capabilities that empower our people and enable us to offer even better products, services, and experiences for our customers”.

Middle East airports taking leading roles in using technology to improve passenger experience

IATA director general and CEO Alexandre de Juniac, in remarks made at the AACO AGM, said most governments in the Middle East and North Africa (MENA) “have understood that infrastructure investments are needed to capture aviation’s economic and social benefits”. Mr de Juniac noted recent developments in Abu Dhabi, Bahrain, Doha, Jeddah, Kuwait and Muscat “are continuing that tradition with respect to building or expanding airports”. However, he noted that technology applied to airports is just as important, and some airports in the MENA region are taking a leading role in using technology to drive improvement in the passenger experience. Examples include: Dubai International introducing a biometric system allowing passengers to clear immigration without showing a passport; Doha Hamed International introducing the Smart Airport programme, which uses facial biometric recognition across all key passenger touch points creating a true end to end seamless experience; and Abu Dhabi and Muscat airports trialling biometric technology to improve the passenger experience and security.

Saudi Arabia GACA plans airport building charges increase at all Saudi Arabia airports

Saudi Arabia’s General Authority of Civil Aviation (GACA) reported plans to increase the charges for the use of passenger terminal buildings and facilities at all of Saudi Arabia’s airports from 01-Jan-2020. GACA reported the fee was introduced to fund future airport infrastructure development projects and enhance the level of airport services offered. Airlines will collect increased charges via fares.

Qatar and Kazakhstan sign air transport MoU

Qatar Civil Aviation Authority and Kazakhstan’s Civil Aviation Committee signed an MoU in the field of air transport. The agreement allows for the operation of seven passenger services between Nur-Sultan and Almaty. The MoU also includes the operation of seven air cargo services with full transportation rights between the two countries and any number of passenger and cargo services with full freedom of transport to 11 international airports in the Republic of Kazakhstan.

SalamAir to break even in 2019 and turn a profit in 2020

SalamAir CEO Mohamed Ahmed stated he expects the carrier to break even in 2019 and “start making a profit” in 2020. Mr Ahmed stated once the carrier has “three years of profitability”, he is confident the board and shareholders will want to take the company to IPO so they “can fuel the next stage of growth”.

Saudi Arabia and India sign revised air services agreement

India’s Government reportedly signed a revised air services agreement (ASA) with Saudi Arabia in late Oct-2019. Under the terms of the revised ASA, the number of seats per week permitted on services connecting India and Saudi Arabia will increase from 28,000 to 50,000 seats. The increase will be implemented in phases, commencing with an increase to 36,000 seats per week.

News Briefs

  • Etihad Airways reported Etihad Guest and Emirates Islamic signed an MoU to launch a jointly branded credit card. The credit card extends the existing partnership between Etihad Guest and Emirates Islamic, providing passengers with more opportunities to earn miles and redeem for rewards.
  • Plaza Premium Group announced plans to open a 1,260 square metre pay to use lounge at Dubai International’s terminal 3, which is due to open in Dec-2019.
  • Saudi Arabia’s General Authority of Civil Aviation (GACA) launched the ‘Signal’ service for deaf passengers at Jeddah King Abdulaziz International and Riyadh King Khalid International airports. Signal is an app that assists deaf passengers with check-in and other airport services by providing interactive sign language communications.
  • Qatar Airways CEO Akbar Al Baker said the airline is “still open to starting an airline in India” but “we really do not have direction on exactly how to do it, because we get so many mixed messages” from India’s Government regarding foreign ownership regulations for airlines. Mr Al Baker has said the airline is “not interested” in bidding on the upcoming tender to acquire a stake in Air India, and is “only interested in IndiGo”.
  • Iran Airports & Air Navigation Company Mazandaran province airports general manager announced Ramsar Airport aims to complete its runway refurbishment project and reopen the 2700m runway by the end of Dec-2019.

CAPACITY SNAPSHOT: Middle East Domestic Seats (as at 11-Nov-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

  • Emirates Airline reported it received three A380 aircraft in H1FY2019/20 with three more scheduled for delivery by the end of FY2019/20. It has also retired six older aircraft, with a further two to be returned by 31-Mar-2020. As of 30-Sep-2019, fleet stood at 267 aircraft including freighters.
  • Gulf Air is scheduled to take delivery of one A320neo aircraft (MSN 9331) on 01-Dec-2019, as recorded by the CAPA Fleet Database.
  • Air Arabia plans to deploy A321LR aircraft on Sharjah-Gassim (weekly, effective 12-Mar-2020); Sharjah-Multan (weekly, effective 18-Jan-2020, increase to four to five times weekly from 01-Feb-2020 and daily from 01-Mar-2020); and Sharjah-Shiraz (once to twice weekly, effective 10-Mar-2020), reports Routes Online.
  • Kuwait Airways received one A320-200neo (9K-AKN, MSN 9303) as recorded by the CAPA Fleet Database. The carrier now operates two A320neos with 13 remaining on order.
  • Qatar Airways plans to deploy A350-900 equipment on two of three daily Doha-Denpasar frequencies, effective 25-Oct-2020.

CAPACITY SNAPSHOT: Middle East International Seats (as at 11-Nov-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

  • Jazeera Airways confirmed plans to launch four times weekly Kuwait-Kathmandu service, effective 17-Nov-2019. The carrier plan to increase the frequency to daily, effective Jan-2020. The route marks the first direct commercial service between Kuwait and Kathmandu.
  • SaudiGulf Airlines launched four times weekly Riyadh-Amman service, effective 07-Nov-2019.
  • Gulf Air announced plans to resume three times weekly Bahrain-Erbil service, effective 02-Feb-2020. The carrier plans to operate the route with A320 equipment.
  • Iran Air launched a Semnan-Mashhad service, effective 05-Nov-2019. It also plans to resume Tehran-Rome, effective 02-Dec-2019.
  • Yemenia announced Yemen Ambassador to Kuwait Dr Ali Mansour bin Sefaa met with Yemenia chairman Ahmed Al-Alwani and Yemenia deputy director general Abdul Malik Mutahhar to discuss the possibility of resuming direct air service between Kuwait and Yemen.
  • Etihad Airways plans to launch Abu Dhabi-Tbilisi, effective Mar-2020. The carrier plans to operate the route with A321 equipment.
  • SCAT Airlines plans to launch weekly Almaty-Jeddah and Almaty-Madinah services from 30-Nov-2019, operating with Boeing 757 aircraft. The services will operate in partnership with Qazaq Travel.
  • Oman Air plans to reduce Muscat-Delhi frequency from three to twice daily, effective 01-Dec-2019, according to Routes Online. The carrier plans to operate the route with A330-200/-300 and Boeing 787-8/-9 equipment.