Qatar Airways

Etihad Airways gets springboard into Northern Europe with 2.9% stake in Aer Lingus

The United Kingdom is emerging as an end-game country for the Middle East triumvirate: Emirates has firmly planted itself across the country, Qatar Airways is cosying up to British Airways and Etihad Airways’ 2.9% stake in Aer Lingus has the potential to give it a springboard into the UK, codesharing on Aer Lingus’ wide Ireland-UK network.

The purchase is a minor investment at Aer Lingus’ present share price of under EUR1, but it represents an opening gambit for a further stake, as well as to develop a partnership and codeshare arrangements. Etihad has developed large virtual networks and has bought into carriers, but the Aer Lingus deal could come to make the UK/Ireland the highest strategic saturation point for the Middle East network carriers. In that view, Etihad’s stake was as much strategic as it was defensive. For Aer Lingus there is also a possibly warm feeling, as British Airways recharges its Ireland services, post-bmi acquisition.

Myanmar set to become Asia’s next big aviation growth market

Myanmar’s aviation market is poised to enter a major period of growth as the country begins to open up following landmark elections earlier this month that were won by Aung San Suu Kyi’s National League for Democracy. The election was seen as a turning point for Myanmar, formerly known as Burma, and the start of a more favourable business environment, including for aviation. Several Asian carriers and airport operators have identified near-term opportunities in Myanmar. The opportunities for all types of carriers – local and foreign, domestic and international, low-cost and full service – face no limitations in the medium term as the Myanmar market is now the most underserved market in ASEAN and perhaps all of Asia.

Myanmar’s two existing international airports, at Rangoon and Mandalay, are to be partially privatised while a recently opened new airport at the new capital of Naypyitaw will soon start to handle international flights. There are also plans for upgrading several domestic airports, many of which lack basic infrastructure.

The Middle East continues powerfully on thanks to the Gulf carriers, despite some setbacks

The Gulf carriers continued to go from strength to strength in 2011; Etihad made its first (narrow) profit and Emirates again returned the strongest result of any airline globally, even though it was substantially affected by increased fuel prices.

The three major sixth freedom hubs in the Middle East – Abu Dhabi, Doha and Dubai – added 7.7 million passengers between them in 2011, continuing strong growth, despite the regional disruptions. Much of this is testament to the strength of the 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. (The contrast with European governments is extreme, as they meanwhile continue to see the sector as a taxation target, to the great detriment of the industry there.)

Middle East regional carriers have profitable outlook for 2012

IATA’s latest 2012 industry forecast has airlines in the Middle East as the big winners, with the annual profit forecast for the region's airlines revised from USD300 million to USD500 million. It does come with a caveat though: a spike in oil prices could turn the forecast profit into a USD200 million loss for the region’s airlines.

In 2011, airlines in the Middle East reported a combined annual profit of approximately USD1 billion, according to IATA’s estimate. Despite the regional disruptions and spiralling price of oil, passengers in the region kept flying and Middle Eastern carriers increasingly developed their links with the rest of the world.

As they have been for years, financial results for Middle Eastern carriers were unevenly spread across the region.

The world's biggest airlines cautious with capacity growth in March

The world's airlines are being cautious with their capacity deployment in 2012, the latest figures from Innovata show. Carriers increased their capacity by 3.6% during in March, which is slightly above IATA's latest forecast for full-year capacity growth.

Air services expansion to Iraq accelerating this summer

Another round of new routes to Iraq is occurring over the next few months, continuing the wave of expansion by international carriers as the country's economy develops and trade links grow. After almost two decades of limited activity, commercial aviation is playing an important role in the redevelopment of Iraq.

Between the early 1990s and 2000, Iraq was faced with heavy international sanctions, effectively preventing commercial travel. Royal Jordanian was the first international carrier to resume operations to the country, initially operating irregular cargo and charter services and then an on-again, off-again scheduled passenger service. It was only after the fall of the Hussein regime in 2003 that commercial airlines began to return to the country in any numbers.

What began as a trickle of airlines and a handful of routes become a torrent at the end of 2008. More than 20 airlines have added services to Iraq over the past three years. In the past six months alone, flydubai, Etihad Airways, Emirates, EgyptAir, Pegasus Airlines, Turkish Airlines and (the now defunct) Viking Hellas have all added new services or extra capacity into the country. Qatar Airways and Jazeera Airways are set to enter the Iraqi market in the next few months.