Flydubai

flydubai edging towards profitability, making it the fourth profitable carrier in the UAE

flydubai looks like it is set to join sister carrier Emirates in the black this year, according to CEO Ghaith al Ghaith. While it is too early for the carrier to provide an estimated figure, Mr Al Ghaith, talking to Gulf News, said flydubai expects to make a profit in what is just its third full year of operations. However, the CEO expects a "difficult year with the increase in oil prices".

LCCs grab 10% of seats in the Middle East, but growth is slowing

The LCC phenomenon in the Middle East is entering the home stretch of its first decade. The importance of the LCC market in the Middle East has grown steadily since the launch of the region’s first LCC flights by Air Arabia in Oct-2003, but the growth has not been as high as initially anticipated, as carriers can attest to.

Just four airlines make up the regional LCC market – Air Arabia, flydubai, Jazeera Airways and NAS Air. Air Arabia also has two subsidiary carriers – Air Arabia Maroc, launched in 2007, and Air Arabia Egypt, launched in 2010. A third, based in Jordan, has been on hold for several years.

There are also some smaller carriers in the region that are filling the gap between LCCs and full service airlines. Bahrain Air markets itself as a “premium value” carrier, including some LCC elements in its model but also offering two seating classes – including an all-new business class cabin – and a correspondingly greater emphasis on service and product levels. RAK Airways, based in the UAE emirate of Ras Al Khaimah, also has low cost elements, but like Bahrain Air has adopted a hybrid model between full service and low-cost airlines.

Middle East sixth freedom hubs add 8 million passengers in 2011 as home carriers plan further growth

The three major sixth freedom hubs in the Middle East – Dubai, Doha and Abu Dhabi – added 7.7 million passengers between them in 2011. Passenger traffic at the three hubs continues to grow by leaps and bounds, regardless of the regional disruptions that affected traffic in the Middle East last year. Much of this is testament to the strength of their home carriers, the industry aligned development policies pursued at each airport and the vision of local governments to transform their cities into major aviation centres.

Combined, the three hubs had an average passenger traffic growth rate of 10.5%. This is a notably stronger performance than the rest of the Middle East, where international traffic expanded 8.9% over 2011. Hub growth is closely tied to growth from each hub's main carrier: Etihad Airways, Emirates and Qatar Airways. All three have already announced significant expansion in the near future.

Middle East fleet outlook: widebody popularity increases, Airbus to grow market share

The 163 aircraft ordered at last week's Dubai Airshow will keep the Middle East region with almost as many aircraft on order as in service. While the show was marked by Emirates' order for 50 B777s, adding to the carrier's all-widebody fleet, widebody aircraft currently comprise just over half the region's fleet but are set to grow. Widebodies comprise more than 70% of aircraft on order in the region.

Boeing and Airbus will see their market share increase, but Airbus more so, eventually accounting for more than half of all aircraft in the region and Boeing accounting for just over a third. These latest aircraft orders add to an already substantial order backlog by airlines in the region. Most of the orders are concentrated in the hands of the Gulf region’s three largest sixth-freedom airlines: Etihad Airways, Qatar Airways and Emirates. The 163 orders from the show were from airlines and leasing companies and had a combined total value at list prices of just under USD32 billion.

More Middle Eastern airlines poised for profits

Etihad Airways, Qatar Airways and flydubai are majority state-owned – 100% for Etihad and flydubai, 50% for Qatar – and all three have been among the brightest growth stories in a region already noted for its rapid development.

Now the three look set to join the ranks of Middle Eastern airlines that are consistently profitable.

State-owned carriers in the region typically don’t perform well when it comes to their bottom lines. According to IATA, airlines in the Middle East as a group have had just three years of profitability in the last seven.

After airlines across the region reported a combined profit of USD900 million in 2010, regional profitability returned after a four-year absence. The outlook for 2011 and 2012 is strongly positive, even with the impact of the Arab Spring.