UAE airports forecast 6.3% passenger growth in 2017 despite headwinds

  • Middle East carriers reported the strongest annual traffic growth of any region globally for the fifth year running in 2016
  • Saudi Arabian Airlines Director General His Excellency Engineer Saleh bin Nasser Al-Jasser to head aviation seminar programme at Arabian Travel Market
  • US ban on electronic devices could affect over 15,000 passengers daily

Despite sluggish global economic growth, low oil prices, ‘Trumponomics’ and Brexit, the UAE will lead Middle East passenger growth in 2017 with an annual increase of more than 6.3%, according to estimates from the International Air Transport Association (IATA). However, aviation-related discussions during Arabian Travel Market this year will no doubt be dominated by the recent US-led ban on electronic devices and the repercussions for regional airlines.

Aviation features heavily in the seminar programme at ATM 2017, held between 24-27 April in Dubai World Trade Centre. The sessions will be moderated by John Strickland, Director, JLS Consulting, who, with 34 years of industry experience, is an authority on the business models of regional, global, legacy and low cost carriers.

Strickland said: “2017 presents a much more challenging picture for the airline industry in the Middle East, particularly in light of the recent electronics ban enforced by the US and UK. The immediate reaction was to allow passengers to use their laptops right up until boarding, but more recently Tim Clark, President of Emirates, revealed they had considered loaning laptops to passengers.”

The ban includes tablets, laptops, eReaders and anything that measures larger than 16cm x 9.3cm (6.9 inches x 3.66 inches). Airlines affected by the US ban include: Royal Jordanian Airlines, Egypt Air, Turkish Airlines, Saudi Arabian Airlines, Kuwait Airways, Royal Air Maroc, Qatar Airways, Emirates and Etihad Airways. While the UK ban includes: British Airways, EasyJet, Jet2.com, Monarch, Thomas Cook, Thomson, Turkish Airlines, Pegasus Airways, Atlas-Global Airlines, Middle East Airlines, Egyptair, Royal Jordanian, Tunis Air and Saudia.

Overall the policy affects about 50 flights a day to the US, meaning the ban could impact over 15,000 passengers daily. Emirates currently operates 18 daily flights to 12 US airports; Etihad runs 45 flights a week between Abu Dhabi and six US cities; and Qatar Airways flies directly from Doha to 10 US cities. Despite these setbacks, it is a good news story for the Middle East’s major carriers and airports, as IATA forecasts an additional 258 million passengers a year on routes to, from and within the Middle East by 2035. While the region will require 58,000 new pilots by that time to meet the increase in demand.

Strickland, who was instrumental in KLM’s decision to establish the low-cost operator Buzz and also worked for British Caledonian, British Airways and KLMuk, will also lead delegates, through a number of sessions, taking place over the course of the four-day show, addressing a wide range of issues facing the aviation industry today and in the future.

“Elsewhere in the industry, security threats have already dented traffic in a number of markets whilst political changes, including the UK’s ‘Brexit’ and a new US Government, are creating further uncertainties.

“Although oil prices are edging upwards, within the region, Emirates reported an AED786 million ($214 million) profit for the six months to September 30 2016, down 75% on the same period the previous year, and revenues also declined slightly to $11.4bn (down from $11.5bn). While Etihad has indicated a likely change in its investment strategy, particularly into other airlines,” added Strickland.

Middle East carriers reported the strongest annual traffic growth of any region globally for the fifth year running in 2016, according to the IATA. RPKS (revenue passenger kilometres) grew 11.8% consolidating the region’s position as the third-largest market for global passengers. Capacity growth of 13.7% outstripped demand however, driving down the average load factor by 1.3 percentage points to 74.7%.

With a number of aviation mega-projects underway across the GCC and wider Middle East, airports are expanding slightly ahead of the curve in demand, with capacity in 2016 increasing by 13.9% and a forecast for 2017 of 10.1%. Meanwhile, Middle East passenger numbers are only expected to rise by 9% this year, a further dip compared to 2016’s 10.8% growth.

“Aviation is integral to the Arabian Travel Market show and plays a significant role not only during the seminars but also on the exhibition floor. With investment in transport infrastructure, especially the expansion of airports, prevalent throughout the region, the growth in passenger numbers will continue unabated,” commented Simon Press, Senior Exhibition Director, Arabian Travel Market.

The first aviation themed seminar session takes place on Wednesday, April 26th at 11am on the Global Stage when Strickland interviews Saudi Arabian Airlines Director General His Excellency Engineer Saleh bin Nasser Al-Jasser. A first for ATM, the live interview will explore Saudia’s considerable investments in new fleet and product innovations, as well as the launch of low-cost subsidiary FlyaDeal. Further aviation themed seminar sessions, in the Showcase Theatre and on the Global Stage, will look at the challenges and strategies for the airline sector as well as analysing the local market and the latest developments from leading Asian airlines, including Malaysian Airlines and Philippine Airlines.

Aviation will also be under the spotlight in the exhibition halls too, with confirmed airlines including: Air Seychelles, Air France/KLM, Emirates, Etihad Airways, flydubai, Flynas, Lufthansa German Airlines, Middle East Airlines, Oman Air, Qatar Airways, Saudia, Sri Lankan Airlines, Malaysian Airlines, Philippine Airlines, Thai Airways International and Turkish Airlines.

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