Rapid growth of Middle East airlines

Despite their current sizable orderbooks, the growth of leading Middle East airlines is likely to slow down gradually, according to a senior Boeing executive. \"What is happening is that the airlines in this region especially the big three [Emirates, Etihad and Qatar Airways] have been growing at a rate of about 20 per cent,\" said Dr Fariba Al Amdari, Vice-President of Marketing and Value Analysis at Boeing Commercial Airplanes. \"And as we go in the future, they certainly will grow, but I don\'t think that they can continue to grow at that rate. They are more likely to grow at an average of 10 per cent over the next 10 to 15 years rather than the 20 per cent that we have seen historically.\" On whether the capacity of regional airlines is in line with demand, Al Amdari said: \"Overall, the capacity seems a lot, but the airlines are in a good position because they offer a really high-quality product at competitive prices.\" While regional carriers will \"stimulate some demand\", they will [also] take away market share from European, Asian and some American airlines,\" she added. \"And that\'s why some of the airlines in those markets are becoming a bit uptight about allowing their respective governments giving too much access to this region\'s airlines, especially Emirates.\" Emirates is facing stiff opposition in Europe, Canada and Australia with their governments threatened by its strong growth denying the Dubai carrier more landing rights. \"For other airlines to compete on products and prices [of Gulf carriers] is very hard,\" said Al Amdari. \"That\'s why they just want to stop them from growing in their respective countries.\" The Dreamliner 787, Boeing\'s long-haul aircraft, which appeared at last week\'s Paris Air Show, will make its regional debut in Qatar Airways livery next February through a pair of Dreamliners. \"The 787 is a very different type of aeroplane; it\'s a medium-sized plane with a long-range capability,\" added Al Amdari. \"And it provides huge flexibility to airlines because you can deploy it on many routes… unlike the A380 which has to be long-haul and very dense. Besides, airports need to have the capability to receive it. That\'s why the 787 is so popular, efficient and versatile.\" Al Amdari said low-cost carriers \"have the potential to grow here as we have seen the business model being successful in the US, Europe and Asia. \"But there are some constraints. One is lack of liberalisation, or openness of the market, so they can\'t operate to anywhere that they think commercially makes sense. They cannot do that as they have issues getting the bilateral rights to have access to other countries.\" The other issue is airspace compatibility. \"Although there has been a lot of investment in infrastructure development - approximately $45 billion (Dh165 billion) is committed over the three decades to the region\'s airport projects the airspace is not compatible with what\'s been invested on the ground, in terms of capacity,\" she said, adding that is because so much is \"devoted to the military operations.\" On how these issues can be tackled, Al Amdari said: \"One is the recognition that there is an issue.\" While global carriers are moving towards consolidation, the Middle East ones are not even looking in that direction. Whether resisting consolidation posed a hindrance to growth, Al Amdari said: \"If you look at the structure in the region, there are four types of business models: the big three airlines focused on connecting passengers; low-cost carriers at the far end; and two types in the middle larger network carriers like Egypt Air, Saudi Arabian Airlines and medium-sized carriers such as Oman Air and Royal Jordanian. \"I don\'t see many alliances or mergers happening at the top. In the middle [segment], it\'s very likely because it\'s not a very comfortable position as bigger airlines can eat into your market share.\" From / Gulf News