Arab carriers poised to achieve robust growth
December 6, 2017 | 5:29 PM
by A E JAMES/[email protected]
Experts who attended a panel discussion at the conference called for adopting an open skies policy to develop the aviation sector in the region. - Supplied picture

Dubai: Arab airlines are expected to achieve a robust 7 to 8 per cent growth in the number of passengers this year, despite the geo-political crisis in several countries in the region and a short-term ban on laptops from the Middle East region to the United States, said a senior official of Arab Air Carriers’ Organisation (AACO) here on Wednesday.

Arab airlines carried more than 160 million passengers last year, while the airports in the region have handled 301 million passengers in 2016, Abdul Wahab Teffaha, Secretary General of AACO, told journalists on the sidelines of the Arab Aviation Summit. “We are expecting the total number of airline passengers in the Arab region to touch 340 million this year,” he added.

Airlines in the Arab region, especially Gulf carriers, are able to expand their presence in the global market, Teffaha added. "The expansion of Gulf carriers in the international market provides a cushion for these airlines to neutralise the impact of adverse effects from the regional crisis. GCC (Gulf Cooperation Council) airlines are the engine of growth in the Arab region,” he noted.

Referring to the new terminal at the Muscat International Airport, he said; “Oman has great potential (in developing the aviation sector). Oman is an attractive place for tourists.”

Teffaha remarked that the budget airlines were playing an important role in strengthening air traffic. “The share of low cost airlines in the Arab region was just 4 per cent in 2006, which has grown to 22 per cent last year. The market itself is growing, and the share of low cost carriers is also growing. Low-cost airlines in the region carried 35 to 36 million passengers last year,” affirmed the AACO official.

However, the crisis in countries such as Syria, Libya and Yemen has been affecting the yield of airlines. The net earnings of Arab airlines declined to $300 million in 2016, from as high as $1.5 billion in the previous year. “However, the airlines are making profit,” he reiterated.

Addressing the aviation summit, Adel Al Ali, Group Chief Executive Officer of Air Arabia, stated that the total number of passengers in the Arab region was expected to touch 500 million by 2020, while the global passenger numbers would grow to 7.5 billion during the same period.

Ali also observed that the aviation sector in the region was facing several challenges, which include air traffic management and rising airport charges.

The travel, tourism and aviation sectors create ample job opportunities and drive the economic growth. As unemployment is a major challenge faced by the Arab countries, efforts are needed to train pilots and engineers required by the aviation industry in the region.

Open skies policy

Experts who attended a panel discussion at the conference called for adopting an open skies policy to develop the aviation sector in the region. Governments in the region need to work on attracting tourists, adopt an open skies policy and create the right policy measures to develop the aviation sector. “I do not think many governments in the region subscribe to the idea. An open skies policy will attract investment and market access,” explained Teffaha of AAOC.

However, Stefan Pichier, Chief Executive Officer of Royal Jordanian, stressed that the open skies policy was against the strategy of governments in the region to develop their national carriers. The in-country value of investing in national carrier is much higher than allowing an international airline to operate. “Sometimes, it (open skies policy) is painful,” noted Pichier.

The aviation policy of governments in the region, especially the UAE, Egypt and Saudi Arabia, has changed a lot in the last two decades. Saudi Arabia is looking at privatising its national carrier.

Teffaha underscored that there was a move to create a single aviation market in the Arab region, similar to the European Union. Accordingly, a proposal was mooted during the Damascus convention in 2004, which was attended by eight countries. However, more stability is needed in the region to create such a common aviation market.

The Arab Aviation Summit, which was organised by Air Arabia, was held under the patronage of Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority (DCA) and Chairman and Chief Executive of Emirates Airlines and Group.

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