On a different plane

On a different plane

The global air industry is having a tough time – if it’s not the recession, it’s a volcano causing headaches. But in the region, airlines are flying high.

May 20, 2010 1:49 by Sam Potter

From a global perspective, these are tough times for the airline industry. Having mostly survived the financial downturn, airlines had been hoping for a return to healthy growth in 2010. Those hopes were severely dented last month with the eruption of the Eyjafjallajokull volcano in Iceland, which wreaked havoc across the European continent, closing most airspace and costing the airlines billions of dollars.

As if that wasn’t bad enough, some companies are also victims of their own failures; British Airways is in the midst of a very public labor dispute, the result of which will be strikes that cost the company in the hundreds of millions of dollars.

But drama like that doesn’t seem to have affected Middle Eastern carriers. According to the UAE’s General Civil Aviation Authority (GCAA), for example, air traffic movement in the country in April grew 10.6 percent. That’s despite the volcano’s ash cloud.

Khaleej Times quotes the GCAA as reporting that total air traffic movements reached 52,300 in April, compared to 47,300 in the same month last year. And average growth for the first four months of the year was a whopping 11.5 percent, according to the report.

Elsewhere in the news this week, Saudi Arabia was also reporting positive air industry news. Saudi Airlines’ director general Khaled Al-Molhem announced that the national carrier would purchase more advanced aircraft in the coming years to help strengthen its fleet, confront competition and launch to new destinations. Quoted in Arab News, Al-Molhem said Saudi would receive all of the 70 new Airbus and Boeing aircraft it has ordered by the end of 2014.

And another major regional carrier, Emirates Airlines, declared a dividend of AED 1.6 billion, according to Gulf News. The huge payout comes on the back of net profits for year end March 31 2010 of AED 4.2 billion, and will be paid to the airline’s shareholder, the Dubai Government.

According to the report, last year, while the airline industry overall lost $9.4 billion, Emirates quadrupled its profits.
The Middle East’s strong performance in this sector is welcome good news after months of doom and gloom for business in the region. It implies a vibrant, dynamic and growing economy; best of all the industry shows no signs of slowing down.