Fierce competition among Gulf airlines threatens Egypt's share of the regional market, reports Amirah Ibrahim In Dubai last week the world's two airplane manufacturers were competing for a bigger slice of a regional market that is booming despite surging fuel prices and terror threats. During the four-day event, which attracted 726 exhibitors from 46 countries, $21.3 billion worth of deals were agreed on. For the first time the Egyptian delegation was headed by Minister of Aviation Ahmed Shafiq. "Such events present an opportunity to network and meet our business partners," Shafiq told Al-Ahram Weekly. "And that is essential given our plans over the next few years to develop Egypt as a key regional aviation hub." At the core of those plans, said Shafiq, is the national carrier, as well as the further development of Egypt's airports. "Cairo International Airport is currently being expanded to receive 20 million passengers by 2007." The Dubai air show underscored the fierce competition for Middle Eastern contracts between the world's dominant plane makers. Boeing attempted to steal a march on arch-rival Airbus by announcing a $6 billion plus order from the UAE. And by the end of the event the US company appeared to be in the lead with $14.3 billion of orders compared with the $8.24 billion secured by Airbus. The European company, though, forecast that by the end of the year it will have caught up with its trans-Atlantic rival. EgyptAir recently ordered 12 Boeing 737s. It currently operates a fleet of 39 aircraft -- both Airbus and Boeing -- servicing 60 destinations. But by 2010 the carrier hopes to increase its fleet to 80 planes. Airbus used the Dubai show to unveil the Airbus A380 for the first time in the Middle East. Not to be outdone Boeing showcased its own 777-200LR, which recently completed a record breaking 23- hour nonstop flight from Hong Kong to London. Both companies are anxious to cash in on the region's growing aviation sector. A study released by Boeing forecasts that airlines in the Middle East will require 900 new aircraft over the next 20 years at a cost of $115 billion: "Air travel in the region is expected to grow above the world average at 5.5 per cent annually over the next 20 years. Long-term prospects will be helped by forecasts for growth in population and assumptions that oil prices will remain at long-term sustainable levels." Individual airlines are also competing to improve their positions in a market which, according to the International Air Transport Association (IATA), saw passenger traffic in the Middle East grow by 15.3 per in the first nine months of 2005. Globally, passenger traffic grew by 8.3 per cent. "The biggest passenger and freight growth over the next five years will be seen on the Middle East to Asia route," forecast IATA. Dubai, Qatar and Abu Dhabi have ambitious plans for their carriers as they compete to become the regional hubs linking Europe to Asia, Australia and Africa. Qatar Airways recently signed a letter of intent to acquire 60 new generation Airbus A350s worth $10.6 billion. The carrier then added a $4.6 billion order for 20 Boeing 777. The airline's current fleet of 42 will have grown to 110 planes by 2015. Emirates, which ordered 45 new Airbus A380 super jumbos capable of carrying 555 passengers each, surprised many attending the air show when it announced it had decided to more than double an order already placed with Boeing from 22 Boeing 777s to 45. Shafiq, though, sounded a note of caution about taking plane manufacturers' projections of increased passenger traffic too much to heart, saying "studies prepared by manufacturers tend to encourage more sales." "Our fear is that demand for more planes now will have a negative impact on the aviation industry. Ten years from now and there will be no new orders being made and that is an obstacle for an industry that wants to continue improving and developing its products." If the aircraft purchasing mania seen in Dubai does not stop, Shafiq predicts, the Middle East will become the focus of fierce industry struggles that could damage business. He warned that other carriers will not stand idly by while some airlines seek to dominate the market. "Our business will be affected, as will the business of the world's biggest international airlines. Airlines will begin to cooperate more to counter perceived threats to their markets and EgyptAir will be no exception." "We are pioneers in the Middle East and we also possess enormous potential for greater passenger movement. Current development plans are there to ensure Egypt is not frozen out by the competition."
