International lenders did not disclose specificities, but said it was part of global cost-cutting plansNovember 26, 2015 11:32
The IATA predicts Middle Eastern airlines will see some rough weather in the coming months, but national carriers in the region continue to announce expansion plans.
November 2, 2008 1:47 by kippreport
Qatar Airways is hoping to add more goodies to its shopping bag. The airline is one of the potential bidders for Greece’s state-owned Olympic Airlines, reports Reuters. The Greek airline has accumulated losses of around $3.52bn, and the country announced plans to fully privatize it by the end of 2009.
The Greek government has said that it would announce Olympic’s short-listed applicants early next week.
While Qatar Airways will be keeping its fingers crossed, the IATA has just announced that airlines in the Middle East will likely see revenues drop due to the global economic downturn. The IATA figures for September show that passenger traffic for the regional airlines has dropped for the first time in years, falling 2.8 percent on the same period last year.
It has predicted that profits will fall from $300m in 2007 to $200m this year, and said that airlines may be forced to cut back their large aircraft orders (carriers in the region are scheduled to take delivery of around 200 aircraft by March 2010, out of total orders for more than 1105 aircraft delivered to airlines worldwide).
But IATA’s statistics and predictions don’t seem to be spooking regional carriers. Last week, Jazeera Airways announced expansion plans, and promised to spend $2.4bn on new aircrafts by 2014.
So what is prompting this buoyant mood to buy more?
All the major airlines in the region, including Emirates, Etihad and Qatar Airways and low-cost airlines such as Air Arabia and Jazeera are not only adding more aircraft, they are also rapidly increasing their destinations. Emirates is also set to launch Go Dubai, its own low-cost carrier. Is the growing regional competition pushing the airlines towards expansion?
Also, with many of the airlines being government-owned, financial backing is not necessarily a problem. And although the IMF has warned that the Middle East is not immune to the global financial crisis, the wealthy sovereign funds from the region have been rapidly buying up eager money-starved companies from across the world. Perhaps the aviation industry is reflecting the thought of seeing the opportunities during the current crisis, in the hope that they will earn hefty rewards in the future.