Financial Time: “A hard landing for the Gulf’s airlines”

3 Comments

Financial Times run an interesting piece earlier this week that is worth a read for those that fly on any of the ME3 (Emirates, Etihad and Qatar Airways).

FT

For the first time, the ME3 are projected to grow in low single digits this year and Qatar capacity wil actually decrease due to the blockage.

You can access the Financial Times piece here of which below is an excerpt:

The impact of this instability is directly affecting earnings. Profits for all airlines in the Middle East are forecast to more than halve, from $1.1bn in 2016 to $400m this year, according to Iata, the global airline trade association. The region’s carriers will make an average $1.78 per passenger in 2017, compared with a global average of $7.69.

According to current schedules for 2017, the average annual increase in seats for the UAE carriers will now be 2 per cent and 3 per cent respectively over 2016, and Qatar Airways will drop 1 per cent, figures from Flight Ascend Consultancy show. Peter Morris, its chief economist, says political problems and US visa issues have had a big impact on the capacity deployed in different countries.

Qatar had been the star performer among the Gulf airlines. In contrast to its rivals, it announced net profit growth of 22 per cent to QR1.97bn ($541m) and an increase in revenues of 10 per cent to QR39.4bn in the financial year ending in March. Its blend of wide and narrow-bodied aircraft provided the flexibility to navigate weaker demand in a region hit by falls in the oil price.

Conclusion

Nothing new on this FT article really but all the development this year nicely summarized in one piece with nice graphics.

It would have been a miracle if nothing had happened to Emirates, Etihad and Qatar Airways, and the growth would have just continued without any deterrents and outside shocks.

Let’s face it. People prefer direct flights but are willing to connect if the price is right or if no direct flights exist. Dubai, Adu Dhabi and Doha just happen to be strategically located where tunneling connecting passengers between Europe and Asia makes sense.

If you enjoyed this article, get our blog updates for free!

SHARE
Previous articleAirfare of the Day: Alaska Airlines New York (EWR) to San Diego ECONOMY CLASS $119 (One Way) / $236 (Round Trip)
Next articleJapan Airlines And VISTARA To Begin Codeshare & Frequent Flier Partnership In 2018

YOU MIGHT ALSO LIKE