Dubai: UAE carriers Emirates and Etihad should aim for more deals with the tourism industry operators to get more travelers to fly again.
“It is very important to expand alliances with hotels, resorts and so on, just to attract more people to travel,” said Mohammed Ali Albakri, Regional Vice-President at IATA. “That will energize the entire travel and tourism industry together - rather than air travel working on its own and tourism industry working on its own.”
Local carriers keep adding more cities as part of the resumption of services. And Dubai’s tourism authority has maintained a high-pitch campaign in all of the prime source markets for its tourists. The full benefits should start to show up by October or November.
A big plus is the extent of support being extended to airlines to ease their way back from the pandemic. Media reports have highlighted the Dubai Governments $2 billion injection into Emirates airline.
“We are waiting to get the proper confirmation, but we welcome such moves from any government,” the IATA official added. “We have seen governments that strongly provide financial support (to their airlines) in Europe, China and even in poorer African countries.
“We are waiting for the entirety of the Middle East governments to tag behind the travel industry.”
Cargo will not be able to carry these carriers forever
As for airlines, they are constantly reworking their operations and resizing fleets to be as agile as is possible, said Albakri. Airlines will also have to contend with sudden spikes and drops in demand.
It is here that Gulf and Middle East airlines have been slow to adjust – especially those that operate only wide-body aircraft. Subdued business travel along with travellers’ shifting preference to non-stop flights will also hurt airlines with similar business models.
“Not only are the fixed and semi-fixed costs for wide-body aircraft higher, long-haul passenger demand has suffered the most due to current pandemic,” said Piyush Bansal, an analyst at aviation consultancy ICF.
Cargo leads the way
Demand for cargo remains at a higher level, especially in the Middle East. IATA data shows that seasonally-adjusted demand for cargo in July was actually up 7.2 per cent month-on-month – and the best among all regions.
But as more freight capacity comes back into operation, carriers will have to find “new ways of figuring out how to really restore (their) financial condition,” he added. “Cargo will not be able to carry these carriers forever.”