Airlines resilient to impact of downturn

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Emirates has reported half-year profits and expects financial success to continue despite downturn.

Regional and international airlines operating Middle East routes as well as private jet firms are bucking the downward trend witnessed by the global aviation industry.

Despite the economic crisis plaguing the world at present, Gulf-based carriers are forging ahead with expansion plans, international airlines are expanding in the Middle East and the private aviation sector is going gangbusters.

Emirates Airline last week announced a net profit of AED 284 million (US $77 million), for the first six months of its current financial year and chairman HH Sheikh Ahmed bin Saeed Al-Maktoum said providing there was “no further fall-out from the current global financial situation”, the airline anticipated “a robust second half of the financial year”.

Not to be outdone, Qatar Airways recently secured a US $500 million 12-year finance lease for the purchase of three Boeing 777 aircraft, with Standard Chartered Bank acting as facility agent and security trustee for the deal. The aircraft will be delivered by the end of 2008.

“Qatar Airways has built up a strong reputation in the international marketplace with a solid long-term growth strategy that can weather any crisis,” the airline’s CEO Akbar Al Baker boldly claimed.

In the meantime, Abu Dhabi flag carrier Etihad Airways keeps rolling out new destinations – Moscow, Minsk and Lagos to name but a few – and recently announced plans to up its Sydney services to 11 weekly, as well as launching a daily Melbourne route in March.

And, while international carriers are consolidated in most regions around the world, they are rolling out extra frequencies on routes to the Middle East.

British Airways (BA) is adding a fourth daily service, operating five days a week, on its Dubai–London Heathrow route from January 2, 2009 and Singapore Airlines will introduce a new four-times weekly service to Riyadh from December 14 having already upped frequencies from Singapore to Dubai from 14 to 16 weekly.

Hong Kong’s national carrier Cathay Pacific has also joined the party by introducing a triple-daily service between Dubai and Hong Kong.

“This was a planned move on our part in spite of the global economic downturn,” explained Cathay Pacific Country Manager for UAE & Oman Clement Tam. “Dubai is still developing and seeing demand, we will experience more people coming in so we had to increase our frequencies really.”

His comments were echoed by British Airways commercial manager Middle East Paul Starrs who admitted that BA’s increase was simply a case of “meeting demand” on the route.

“We have nearly doubled our Dubai to London services in the last two months alone, despite this year being one of the harshest aviation trading environments in history,” he said. “I think that speaks volumes about how important the Dubai and wider Middle East market is.”

The Middle East’s private aviation market, meanwhile, is going through an unprecedented period of growth.

Speaking at the recent Middle East Business Aviation (MEBA) event at Dubai Airport, Abu Dhabi based Royal Jet president and chief executive Shane O’Hare said the luxury executive flight services company was about to embark on a period of “significant growth”.

“We intend to take advantage of our proven track record by forging ahead with our plans to open more bases in the Middle East, and at the same time increase our portfolio of managed aircraft,” O’Hare said.

O’Hare pointed out that the number of exhibitors at MEBA had grown this year by 175% to 244 representing some 30 countries demonstrating there was still “a strong interest overall in the Middle Eastern market”.

PrivatAir vice president of charter sales Edgar Van Schaik concurred with O’Hare and recently told ATN that PrivatAir’s two VIP-configured 757 and 767 aircraft were in high demand in spite of the global economic situation.

“I’m sure the credit crisis will catch up but right now it seems to go the other way around,” said Van Schaik.

Van Schaik said many Middle Eastern business owners were hiring private charters to go “bargain hunting” across the world, buying up businesses and foreclosures outside the UAE.

Not to be left behind, Prestige Jet launched Prestige Holding at MEBA, which will own, manage and operate Prestige Jet and five other subsidiary companies, all related to business aviation.

Prestige Jet founder and chairman of Prestige Holding His Excellency Gaith Ben Hamel Al-Gaith also announced the formation of two new subsidiaries, Prestige Invest and Prestige Flight Ambulance, as well as the acquisition of the Madrid-based aircraft management charter services operator Flylink Express at the show.

This will become the Prestige Jet Spain S.A., the company’s launch-pad to Europe.

In addition, Prestige Holding will develop three new Fixed Based Operations (FBOs) in Qatar, Jordan and Bahrain.

“This has been a banner year for us at all levels. We have experienced remarkable growth and introduced bold initiatives and enhanced services that consistently exceed our customers’ expectations,” said Al Gaith.

Gemma Greenwood is the editor of Arabian Travel News.

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