Business | Aviation

A global leap for UAE’s aviation sector

Carriers this year have dropped their guards and embraced foreign partners aggressively

  • By Shweta Jain, Senior Reporter
  • Published: 17:25 November 26, 2012
  • Gulf News

Dubai: The year has moved on and so have airlines of the UAE. Emirates and Etihad Airways, dropping their guards and joining hands with other global carriers, will perhaps go down as the UAE aviation sector’s biggest feat in 2012.

Until some time ago, legacy carriers of the UAE were happy being on their own and quite opposed to consolidation of sorts, but this year saw them embracing foreign partners quite aggressively, especially in the case of Etihad Airways.

The Abu Dhabi carrier acquired equity stakes in four airlines during the year besides signing a number codeshare deals, thereby aggressively expanding its footprint on the global map.

Emirates signed a landmark 10-year codeshare deal with Australian carrier Qantas in September. And, in a first of sorts, the deal will see loss-making Qantas move its hub for European flights from Singapore to Dubai in a bid to stem losses.

The two airlines will jointly offer 98 weekly services between Australia and Dubai, including four daily A380 flights, Emirates said, adding that the partnership arrangement is expected to take effect in April 2013, subject to regulatory approvals.

flydubai growth

Dubai’s budget carrier flydubai had a busy year too, according to its chief executive Gaith Al Gaith. “We have seen 53 per cent growth in the number of seats available across our route network,” he told Gulf News, adding that the carrier added eight new destinations during the year.

Five new aircraft joined flydubai’s fleet this year, with two more to come before the end of 2012.

Commenting on the UAE’s aviation sector progress, Al Gaith said: “The aviation industry’s potential to drive economic growth in the UAE has long been recognised. With the continuous investment in infrastructure creating quality airports and airlines, this commitment has been rewarded with the contribution of the aviation sector to GDP currently standing at 28 per cent and helping to create buoyancy in the trade and tourism industries.”

Meanwhile, recent figures from aviation watchdog Iata (International Air Transport Association) revealed that the passenger demand for Middle East carriers increased 13.3 per cent in September this year compared to September 2011, exceeding the worldwide average of 4.1 per cent.

“This year has also seen traffic on low-cost airlines rise to 10 per cent of the total market — an increase of three per cent compared to three years ago, further illustrating the appetite for affordable travel,” Al Gaith added.

Air Arabia’s achievements

And rightly so, going by yet another budget carrier Air Arabia’s achievements in the year. This year alone, the Sharjah-based carrier has added over 10 new routes to its network, bringing the total destinations to 81. It has taken delivery of four new aircraft from Airbus in 2012, bringing the total operational fleet to 31.

Air Arabia also welcomed onboard its 27 millionth passenger and the second quarter of 2012 saw the airline posting a 15 per cent jump in passenger numbers to 1.3 million.

“Given the upward trend of rising passenger traffic across UAE airports, the emirates continue to make significant investment in airport expansion and other infrastructure-related projects,” said Adel Ali, CEO of Air Arabia.

Aviation analyst Andrew Charlton echoes similar thoughts: “The decision by the UAE to develop a world class aviation industry is working well. It has been backed up by intelligent policy, focusing on liberalisation and free trade.”

According to Charlton, the UAE’s aviation industry is a positive contributor not only to the UAE and its economy but also to the world economy.

Buying spree

Etihad Airways, for instance, has been on a buying spree and today holds equity investments in four global airlines, including airberlin (approximately 30 per cent stake), Air Seychelles (40 per cent stake), Aer Lingus (near 3 per cent stake) and Virgin Australia (10 per cent stake).

It’s hardly surprising that the carrier generated $281 million (Dh1.03 billion) in revenues from partnerships in the first half of 2012. The carrier has been aggressively pursuing its growth strategy by acquiring equity stakes in some airlines and striking alliances with others.

Going forward, however, the challenge is a regional one, according to Charlton. “The UAE and the GCC in general need to work together to reshape and to improve the airspace surrounding the UAE to ensure that this growth continues,” he said. “World trade increasingly depends on aviation and the various airports of the UAE show how powerful good aviation infrastructure can be.”

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