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. Recent activities mean their is even more focus on the region impacting short-term travel to, from and within the area.
Our regular round-up delivers some of the latest key aviation and travel news stories from across the region.
SPECIAL NOTE: Coronavirus
The COVID-19 outbreak has significantly impacted air service to, from and within the Middle East. Initially, this was on services into China and parts of Asia, more recently into Italy and wider across Europe, and latterly within the region as an increasing number of cases have been recorded.
This has seen restrictions on arrivals, and cancellations of numerous flights across the region. This is a fluid situation that is changing by the day. To keep up to date on the devastating effect of the virus on the aviation and supporting industries, read this new essential daily update from CAPA – Centre for Aviation, which curates intelligence from the World Health Organisation (WHO) and myriad industry sources. Its mission is to help cut through the noise and provide a useful daily snapshot of the COVID-19 outbreak evolution, together with key industry developments.
CAPACITY SNAPSHOT: Middle East Domestic Seats (as at 23-Mar-2020)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)
Emirates Airline has liquidity to ‘survive through a prolonged period of reduced flight schedules’
Emirates Group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum stated until Jan-2020, the company was “doing well” against its “current financial year targets”, but the outbreak of coronavirus has brought progress to “a sudden and painful halt over the past six weeks”. Despite this, Mr Al Maktoum said the airline “has a strong balance sheet” and “substantial cash liquidity” which will enable it to “survive through a prolonged period of reduced flight schedules”, so that it can adequately prepare “for the return to normality”. The airline plans to temporarily suspend most passenger operations by 25-Mar-2020 due to travel restrictions globally as a result of the coronavirus outbreak. The suspensions do not affect cargo services, “which remain busy”. The carrier stated that while borders remain open and there is demand, it will continue to operate passenger and cargo services to the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, the US and Canada. Emirates Group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum stated: “As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re open their borders, and travel confidence returns”. Mr Al Maktoum added the carrier will “continue to watch the situation closely” and reinstate its services “as soon as things allow”.
Middle Eastern airlines have lost USD7.2 billion in revenue due to plummeting travel demand
IATA reported Middle Eastern airlines lost USD7.2 billion in revenue as of 11-Mar-2020, due to the effects of coronavirus on travel demand. Ticket refunds increased 75% year-on-year in 2020, and 16,000 frequencies were cancelled since the end of Jan-2020. Domestic bookings are down 20% in Mar-2020 and Apr-2020 and 40% for May-2020 and Jun-2020, while international bookings are down 40% in Mar-2020 and Apr-2020 and 30% in May-2020 and Jun-2020. IATA published a list of expected disruptions to countries affected by coronavirus, with Saudi Arabia (USD3.1 billion in base revenue losses, 15.7 million in passenger volume losses and more than 140,300 jobs at risk) and United Arab Emirates ( USD2.8 billion in base revenue losses, 13.6 million in passenger volume losses and more than 163,000 jobs at risk) the worst hit countries in the region.
Etihad Airways launches ‘Etihad Credit’, offering free cancellation
Etihad Airways launched Etihad Credit, designed to ease travel plans by permitting customers a free cancellation and offering the original value of their booking to be used as credit towards their next trip. Etihad Credit is available for all customers who have booked to travel before 30-Jun-2020. Customers have until 30-Sep-2020 to rebook their trip, for travel until 31-Dec-2020. Additionally, Etihad Guest Members will be gifted monthly bonus Tier Miles from 31-Mar-2020 for three months to help them maintain their Tier Status. Etihad Aviation Group CEO Tony Douglas announced the carrier “will still be there” after these “unprecedented times” to provide passengers with the “best possible way” to enjoy their travel experience. As previously reported, the carrier cancelled several services across its network and encouraged staff to bring forward paid leave amid the outbreak of coronavirus.
Saudi Airlines Cargo to ensure continuity of cargo and supply operations
Saudi Airlines Cargo announced plans to ensure the continuity of all cargo and supply operations. All cargo services to Europe will continue through Frankfurt and Liège in addition to Dhaka. Work at these stations will run as scheduled to mitigate the impact of the imposed suspension aiming to prevent the spread of coronavirus. Saudia Cargo will operate a number of additional cargo flights to Dubai and other destinations due to the suspension of cargo operations on passenger aircraft. Cargo flights will continue to operate on humanitarian and commercial basis and cover certain key commercial and safe ports and cargo stations around the world.
CAPACITY SNAPSHOT: Middle East International Seats (as at 23-Mar-2020)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)
- Saudi Arabia‘s General Authority of Civil Aviation, via its official Twitter account, announced (20-Mar-2020) the suspension of all domestic services for two weeks, effective 21-Mar-2020, as a precautionary measure against the spread of coronavirus.
- Abu Dhabi Airports has temporarily migrated select operations from Terminal 1 to Terminal 3 at Abu Dhabi International Airport. The terminal operational updates are not due to coronavirus concerns and are part of an initiative to enhance connections for passengers and efficient operations for airline partners.
- IATA regional VP for Africa and the Middle East Muhammad Ali Albakri has confirmed Saudi Arabia and Dubai have suspended airport landing slot rules due to coronavirus impacts. Previously, airlines were required to use most of their scheduled services or else forfeit landing slots at airports.
- Bahrain Airports Company has confirmed Crêpafé will operate a food and beverage outlet at Bahrain International Airport’s new passenger terminal building, while Nasser Pharmacy has signed a five year agreement for the operation of a branch in the new facility.