Egypt expresses 'deep dissatisfaction' to Netherlands over embassy attack    Global pressure mounts as Gaza fighting intensifies and death toll surges    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    At TICAD, Egypt's education minister signs pacts with Casio, SAPIX    Egypt holds special importance for our investments across diverse sectors: Japanese minister    Cairo, Tokyo sign LOI to expand educational cooperation, support for persons with disabilities    Madbouly invites Japanese firms to establish industrial zone in SCZONE    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Al-Sisi meets Qatar PM, Bahrain security adviser to discuss Gaza crisis, regional stability    Indian tourist arrivals to Egypt jump 18.8% in H1-2025: ministry data    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Gulf Airlines face new European challenge
Published in Daily News Egypt on 25 - 10 - 2010

The Gulf's airlines, which over the last decade conquered the world's skies with armadas of long-haul jets serviced by glitzy airports, face a new challenge to their business from their European rivals, even as they move to double their capacity.
Led by Emirates, Qatar and Etihad Airways, Gulf carriers have $200 billion of new jets on order for delivery over the next 10 years, a buying spree that will more than double the number of seats they can offer fliers. The Gulf's carriers are the biggest customers for the next generation of super-long-haul carriers, the Airbus A380, a double-decker behemoth that carries up to 850 people over distances of 15,000 km.
“We're heading for a big bloodletting,” Philip Butterworth-Hayes, lead consultant at the UK-based aviation consultancy PMI Media, told The Media Line. “This growth rate is sustainable for the moment, but the big legacy carriers in Europe are starting to forge more effective alliances.”
Backed by oil-rich governments and fortuitous geography, Gulf carriers offer fliers a compelling package of low fares and the best connections between Europe and the emerging economies of Asia via some of the world's biggest and most modern airports. European and US airlines – known in the industry as “legacy” carriers in contrast to start-up, discount airlines – have struggled to meet the competition.
Middle Eastern and North African airlines today account for about 11 percent of all global airline traffic, up from 5 percent a decade ago, according to the International Air Transport Association (IATA), whose members include 230 of the world's airlines. Dubai International Airport recently surpassed New York's John F. Kennedy for total capacity, and that, before it opens a fourth terminal in 2012.
Across the Middle East, eight new runways are being developed amid $100 billion in airport expansion programs, the IATA estimates.
European airlines are still constrained by factors such as environmental regulations, which make the process of expanding the continent's crowded airports a long and expensive process, Butterworth-Hayes said. But the Europeans have started to regroup, forming alliances that should overcome the shortage of airport space and enable them to offer more frequent flights.
Meanwhile, the continent's carriers are pushing the European Union to provide antitrust immunity for services to Asia like they have on trans-Atlantic and trans-Pacific services. European carriers such as Deutsche Lufthansa and Air France-KLM have rallied against Middle East rivals, alleging they receive unfair subsidies. The Emiratis and others deny the charge.
Like their peers around the world, the Middle East's airlines were hit badly by the global recession, losing $600 million in 2009, Giovanni Bisignani, the IATA's director-general, told a conference in Cairo this week. This year, he forecast, they will earn a collective $400 million as the carriers' expand more slowly than demand, enabling them to fill their planes.
But already, next year, overexpansion will resume, with the number of new seats on the region's airlines expected to outstrip growth in passengers, a trend that will increase costs and weigh on profits. “2010 is as good as it gets in this cycle,” Bisignani told the conference. “The hard work of running airlines continues.”
Gulf airlines developed a winning strategy by flying from secondary cities like Manchester in England or Barcelona in Spain, routing passengers through Gulf airports and sending them on to high-demand destinations like Beijing and Mumbai. A business executive travelling from Madrid or London can typically fly for less on Emirates or Etihad and make better connections than on a traditional European carrier.
Butterworth-Hayes said he doesn't think it likely that renewed competition endangers any of the Gulf carriers for now, but they will face a tougher environment for their ambitious growth plans.
Bisignani said Middle East airlines could help their business prospects by market-opening measures. Morocco and Jordan have concluded Open Skies agreements with Europe, and Tunisia is weighing a similar accord, a trend that could lead to the emergence of low-cost carriers and more fliers.
Nor have the region's airline fully tapped the potential for regional business because efforts to build their regional, short-haul routes have been hampered by regulatory restrictions. The 2004 Damascus Convention was supposed to remedy that, but the number of governments to ratify the pact has so far been “disappointing,” Bisignani said.
Opening more airspace to commercial airlines would help the region's airlines, too. Right now, some 60 percent of Gulf airspace is restricted principally to military use, which limits airspace capacity and flexibility, and forces airlines to operate inefficient routes. “Military airspace is a big obstacle,” Bisignani said.


Clic here to read the story from its source.