Low-cost carriers playing a big role in Middle East aviation growth

This was revealed in the latest analysis from OAG, a leading travel data provider, in its new report, ‘Middle East Skies: A New Era of Competition, Capacity and Growth’.

While the region’s biggest airlines – Emirates Group, Qatar Airways and Saudia Group – continued their impressive performance and led the way, the growth over the past five years has been driven by increasing capacity of Low-Cost Carrier (LCC).

Middle East’s airline surge

The report said Saudi Arabia’s flynas is the fastest-growing airline in the region, having posted a 63 per cent capacity increase for 2024 compared to 2019. It was closely followed by Emirates-owned flydubai, which has grown 56 per cent during the period. Both carriers operated nearly 14.4 million departing seats each, with flynas edging ahead by 25,000 seats.

LCCs now make up 29 per cent of all Middle East capacity, more than doubling from 13 per cent in 2014. Over the past decade, LCC capacity has grown at an 11.5 per cent annual average, far outpacing traditional carriers. Globally, LCCs operated 34 per cent of capacity in 2024.

Both Emirates and Qatar Airways rank among the Top 20 Global Airlines by Capacity in 2024, and the Top 10 by Available Seat Kilometers (ASKs). Emirates Group, Saudia Group and Qatar Airways operated 127 million departing seats in between them in 2024.

The report highlighted clear synergies between Emirates and flydubai and their short-haul and long-haul networks. The combined position in capacity terms of both airlines makes the Emirates Group as the largest, with over 50 million departing seats in 2024, and 23 per cent of market share of Middle East domiciled carriers.

It said 84 per cent of Qatar Airways passengers are connecting traffic. This was followed by 77 per cent for Etihad and 66 per cent for Emirates.

Filip Filipov, COO of OAG commented: “The Middle East region’s strategic position as a global hub, coupled with the dynamic expansion of both low-cost and network carriers, is driving unprecedented opportunities. This vibrant market is setting the stage for future advancements in aviation technology and passenger experience and at OAG, we are thrilled to support this evolution.”

Among other interesting findings in the report…

• Emirates is now the 14th largest carrier globally by seat capacity and ranks fourth in terms of ASKs, trailing only the three major US mainline airlines.
• Qatar Airways has moved from 36th largest airline globally 10 years ago to 19th in 2024. In terms of ASKs, it has advanced from 17th to 6th largest globally.
• The Cairo–Riyadh (CAI–RUH) route remains one of the region’s most competitive corridors with eight carriers in operation.
• The major domestic markets in the region are Saudi Arabia and Iran, which account for 94 per cent of all domestic seats. Despite smaller in terms of population, the Saudi Arabian domestic market is three times larger than Iran’s.
• Compared to the five larger regional markets, the Middle East has reported the second strongest recovery in international capacity. Two regional markets, North-East and South-East Asia, were still below pre-pandemic levels at the end of 2024.
• In 2023, Emirates carried approximately 26 million departing passengers, delivering a profit of over US$104 per passenger (almost three times higher than estimated industry average for 2025), but Oman Air made a loss of US$83 per departing passenger during the same time period.

The growth challenge

With Riyadh Air expected to start operations later this year, OAG believes the Middle East market is likely to “experience significant disruption as additional airline capacity is added through various airline business models and the creation of new airlines in the region”.

“Given the current global economic climate, potential slowdown of development, and the relative low price of oil – which underpins many investments in the region – it is likely that there will be excess air capacity in the next few years,” said the report.

“Align these factors with the high proportion of connecting passengers travelling through the region who typically prioritise price over brand loyalty, the larger airlines will need to compete on product and service differentiation to secure their share of the market.”

In the low-cost sector, smaller legacy carriers are targets for competition and with lower cost base and a product more aligned to emergent markets, their long-term survival may be severely tested towards the end of the decade.

A sharp increase in competition is expected in the region, which is good news for travellers.

A seemingly ever-expanding choice of destinations to reach, along with increased competition, is likely to result in airfares remaining competitive throughout the region.

OAG said that if increased competition leads to lower fares, and with operating costs unlikely to fall, airline profitability will be tested. Airlines with the largest network mass and lowest operating costs per ASK will thrive.