Subscribe Free
in Air Transport / Features

Political instability a threat to Gulf airline industry Ė IATA boss

Posted 9 May 2018 · Add Comment

The International Air Transport Associationís (IATA) top official believes that political instability in the Middle East is posing a threat to the regionís airline industry growth. Kaleyesus Bekele reports.

The Middle East airline industry has not yet totally recovered from the Arab Spring – the 2010 series of protests and demonstrations across the region.
That’s the view of IATA CEO, Alexander de Juniac, who believes that continuing regional political instability is still affecting the industry.
“The tourism industry in Egypt, for example, has not yet fully recovered from the impact of the Arab Spring,” he said.
“The geopolitical instability and security threats hovering in the region are not encouraging the development of air traffic. What we have seen so far is that dynamic actors are able to overcome the challenges. But the more instability you have, the less attractive the region will be.”
The CEO cited the blockade in Qatar, the war in Yemen, and the position of Iran and the Saudi-led countries as not being favourable conditions for air transport.
Speaking of the blockade, de Juniac said IATA believes that the world needs connectivity with Qatar. “We will help to establish normal connectivity between Qatar and the rest of the world. We have practically helped the International Civil Aviation Organization (ICAO) to find an appropriate corridor for Qatar Airways and for the airlines flying to Qatar to be able to have access to the country.”
He said that governments had the right to close their borders when they thought it is necessary. “They can do it but border closure has never been good news to the airline industry,” he added.
Regarding the war in Yemen, de Juniac said that uncontrolled groups were firing short-range missiles. “When missiles are fired by a state army there is no problem because it applies ICAO regulations and warns airlines. But when uncontrolled groups fire missiles, it is dangerous. That is what happened in Ukraine and it is now the case in Yemen. The missiles are not fired precisely and, in that case, there may be a need to establish a no-fly zone.”
He added that, that in the wake of the Malaysian airliner MH17 disaster (a scheduled passenger flight from Amsterdam to Kuala Lumpur that was shot down on July 17 2014 while flying over eastern Ukraine, killing all 283 passengers and 15 crew), pilot awareness of missiles had increased.
The CEO also reacted to the third version of the Trump administration’s travel ban, which the US Supreme Court allowed to go into effect on December 4. The ban bars most citizens of Iran, Libya, Syria, Yemen, Somalia, Chad and North Korea from entering the United States.
“There is little passenger traffic coming from those countries to the US. There are no direct flights between these countries and the US and that is why we believe that the operational consequence will be limited,” he said.
De Juniac said that Gulf airlines had been affected by various factors over the years. “It’s not just political instability, they’ve also been growing at an incredible (double-digit) pace. Now I think they are entering into normal waters,” he said.
“They are now growing like their peers. They are discovering the big world – facing similar issues like replanning their networks, which is normal business.”
Despite the political turmoil, IATA forecasts that Middle East carriers will see net profits improve to $600 million in 2018 – up from 300 million last year.
Demand in 2018 is expected to grow by 7%, outpacing announced capacity expansion of 4.9% (the slowest growth since 2002).
According to IATA, the region’s carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the US, and competition from the new “super connector” (Turkish Airlines).
Despite the challenges, however, there is positive momentum heading into 2018.
 

* required field

Post a comment

Other Stories
Advertisement
Latest News

Fourth Middle East Safety Summit to go ahead in October in Riyadh

The General Authority of Civil Aviation (GACA), in collaboration with the International Civil Aviation Organization (ICAO), will organise the Fourth Middle East Safety Summit from 2-3 of October 2018 in the capital city of Riyadh.

Predicting what's next in the tailor-made revolution

The fusion of big data, artificial intelligence (AI) and in-flight connectivity is changing the way airlines do business. Steve Nichols looks at how cutting-edge technology is changing what you eat, read, and watch on flights, without

Engines power MTU's generation gain

MTU Maintenance sees good growth opportunities for MRO in the Middle East. Sami Ben-Kraiem, the companyís vice-president marketing and sales, Middle East and Southeast Asia, talks to Chuck Grieve.

VistaJet to move HQ to Dubai with new technology division

Dubai is to be the headquarters of a new business aircraft leasing and flight-booking technology company headed by the founder of VistaJet, Thomas Flohr.

On Air Dining recruits top executive chef

On Air Dining, the luxury executive in-flight concierge, has announced the appointment of Mark Brega as itís executive chef.

Solvochem becomes a supplier of aviation gasoline in the Middle East

Solvochem, a supplier of chemicals, petrochemicals, solvents and plastics worldwide, has invested in state-of-the-art facilities for drumming aviation gas (AvGas) at its Jebel Ali location.

TAA SK0902311218
See us at
MarrakechAirshow BT2507241018ASDubai BT1004091018GATM BT1004061118Cargo BT1004091018Aviation Africa BT0607280219AIME19BTA3005120219MEBAA BT1004121218BIAS BT271017161118Istanbul Airshow BT22018MAPS18_BT1207131118