More Losses in Airline Sector Expected Due to Arab Spring

Article Summary
International Air Transport Association officials addressed Middle Eastern airliners’ steep losses last year in a June 17 meeting, writes Dalal Abou Ghazaleh. Most studies point to political tensions resulting from the Arab Spring as well as a rise in fuel prices, while others blame the West for unfairly taxing regional airlines.  reports.

A meeting of the International Air Transport Association was held in Beijing on June 17, at which the effects of Arab Spring on the regional aviation sector were discussed. Industry leaders who participated in the meeting estimated that the sector lost $10 billion last year [2011] due to the political tensions in several Middle Eastern countries.

IATA Regional Director for the Middle East and North Africa Hussein Dabbas expected the region’s aviation sector to continue its decline this year. The Arab spring, coupled with rising fuel prices, caused carriers’ profit to decreased to $700 million last year, after having exceeded $1 billion in 2010. He expects their profits to slip even further, to $400 million this year.

Despite this forecast, Dabbas was optimistic about the future of the aviation industry in the Arab region. “It has become the envy of international airline companies — particularly European ones — which have been waging a campaign against Gulf carriers for some time, and accuse them of receiving government support,” he said.

He noted that Arab governments are investing heavily in the aviation sector and building modern infrastructure. They are expanding their current airports and building new ones as well. He admitted that the Arab aviation industry is suffering from capacity bottlenecks: because the regional militaries control the skies, approximately 50 percent of region’s airspace is off-limits to commercial aviation.

When probed about the prospects for an “open skies” policy in the region, Dabbas said that the problem resided in the plurality of different laws to this regard between countries. However, he noted, some countries have chosen to form bilateral partnerships for an “open skies” policy.

He urged countries to work on removing the obstacles through the application of unified policies among the various aviation authorities. He said that the IATA is working closely with 26 airlines in the region to address issues related to power, routes and fees.

Referring to the achievements made by Gulf airline companies, Qatar Airways CEO Akbar Al-Baqr stressed the need for the removal of the obstacles hindering the aviation sector, and to support those bodies that are capable of developing it.

He stated that Western countries “are weakening the role of the civil aviation sector by imposing taxes on it, which impedes growth and development.” He also argued that aiding this sector will contribute strongly to job creation and foster economic development.

Found in: qatar airways, qatar, iata, economic downturn, economic, aviation sector, arab spring

Cookies help us deliver our services. By using them you accept our use of cookies. Learn more... X