Contributor - Middle East

Peter Shaw-Smith

As the region’s biggest country, it would be reasonable to expect that Saudi Arabia would be the biggest mover and shaker in Middle East aviation. But the UAE has taken that role for itself. In addition to Emirates Airline and Abu Dhabi-based ‘national carrier’ Etihad Airways, Flydubai and Air Arabia are also thriving.

 


Today, Etihad owns stakes in airberlin, Air Serbia, Air Seychelles, Alitalia and Jet Airways, in a new model for international participation by a Gulf airline. Its debt-raising exercise in September this year with its equity airline partners was oversubscribed, eventually raising $700 million to fund expansion. In September, the equity partner CEOs met at a “summit” in Rome to plot the partnership’s way forward.

 


Etihad is seizing the opportunity to spread its culture: In August the airline said almost 200 partner-airline pilots are seconded to Etihad, including 52 pilots from airberlin, 41 from Alitalia, 63 from Jet Airways, 25 from City Liner, four from Swiss-based Darwin Airline and six from NIKI.

 


Etihad introduced its new Boeing 787 Dreamliner on the Abu Dhabi–Zurich route in July. It continues to diversify its portfolio of global funding sources and last year expanded its range of borrowing relationships to more than 75 lenders, investors and lessors. During 2014, Etihad secured $3.5 billion in debt funding from the markets.

 


Trunk Feeders

 


Etihad’s A380 is configured for 417 seats in economy class, 70 in business class and nine first-class areas knows as First Apartments. In addition, the upper deck also accommodates a three-room luxury option known as The Residence by Etihad.

 


Qatar Airways, implicated in the spat with the Big Three U.S. legacy carriers along with Emirates and Etihad, says it is also prospering, with a fleet of 166 aircraft flying to 152 destinations. It launched 12 new destinations a year in the period 2012-14. Meanwhile, its eight-strong corporate-jet subsidiary, Qatar Executive, firmed up an order for 30 Gulfstream G500, G600 and G650ERs at EBACE earlier this year.

 


Qatar Airways has more than 330 aircraft on order worth in excess of $70 billion. On top of 113 other aircraft on order or option, Qatar has 100 Boeing 777Xs, 76 Airbus A350s and 37 Boeing 787s (including options) on order. Qatar Airways Group employs more than 39,000 worldwide, of which more than 23,000 are airline employees.

 


In addition to hatching plans for flights to Ras Al Khaimah, the UAE’s north-easternmost emirate, Qatar Airways also flies regularly to Al Maktoum International Airport, at Dubai South (formerly Dubai World Central). “Ras Al Khaimah is due to launch on February 2, 2016. All our UAE flights have been doing very well: Dubai, DWC and Abu Dhabi are some of our most popular routes,” said Brian Thomas Ashby, a spokesman for Qatar Airways.

 


Saudi Arabia

 


In Saudi Arabia, Sulaiman Al Hamdan, former CEO of private-sector-run NAS Holding, was appointed president of the General Authority for Civil Aviation (GACA) in the New-Year shake-up accompanying King Sultan’s accession. He was quick to spell out the tone of his tenure, particularly on Saudi Arabian Airlines (SAA, more commonly known as “Saudia”). “All Saudia board members and employees are required to exert greater efforts to achieve the airline’s strategic objectives in terms of improving performance and enhancing services to passengers,” he was quoted as saying in Arab News, February 16.

 


Al Hamdan immediately made clear that GACA was not responsible for delays to the operations of new airlines SaudiGulf and Qatar Airways-backed Al-Maha Airways. He became the first GACA head to visit ICAO’s head office in Montreal in June.

 


SAA’s fleet consists of around 77 aircraft, and this is expected to rise soon to 90. The airline is to take 50 Airbus aircraft, 30 A320neo and 20 A330-300s, worth around $8 billion at list prices [see also Islamic finance piece]. Dubai-based International Airfinance Corporation (IAFC), an Islamic leasing fund, will buy the aircraft and lease them to SAA, it said.

 


Oman Air took delivery of its first Boeing 787 Dreamliner on October 11. The airline ordered six 787-8s in 2011. Boeing said it had eight 787 customers in the Middle East with a total of 175 Dreamliners ordered and a backlog of 140.

 


Ten Omani cadet pilots recently graduated from l’École Nationale de l’Aviation Civile (ENAC), the flying school in Toulouse, France. A further 13 Omani candidates have now enrolled at ENAC and are expected to graduate in 18 months’ time, the airline said.

 


After losses narrowed last year, Bahrain’s Gulf Air said in October that it is in talks to buy 40-to-50 new aircraft, with negotiations involving OEMs likely to conclude in early 2016, CFO Sahar Ataei was reported as saying in the local press.

 


Another female official, chairwoman Rasha Al Roumi, is leading Kuwait Airways out of its troubles, as plans for privatization and fleet replacement develop.

 


Royal Jordanian is one of the Levant airlines facing the difficult task of keeping up with well-heeled Gulf cousins. “Regionally and internationally, the current operating environment is difficult, and competition is growing, especially in this part of the world,” Royal Jordanian told AIN.

 


The airline’s rocky road to profitability finally seems to be smoothing out, if not exactly being paved with gold. The airline was profitable in the first half of 2015, to the tune of JD4.6 million ($6.5 million). In 2016, two 787s will join RJ on finance lease, replacing A330s. The two aircraft will join five Dreamliners added to the airline’s fleet in 2014, with a third to come in 2018. RJ’s fleet comprises 27 aircraft: five B787s, two A330s, two A321s, six A320s, four A319, three Embraer 195s, three Embraer 175s and two A310 freighters. Average fleet age is 4.8 years, said Saman.

 


Lebanon’s Middle East Airlines is to streamline its fleet by phasing out Airbus A321s by 2016. The airline told AIN that it currently had a fleet of 17 aircraft, made up of four A330s, two A321s and 11 A320 aircraft. In 2016, this will change to five A330s and 13 A320s, for a total of 18 aircraft, it said. Average fleet age as of September was 5.2 years, the airline said, while passenger load factor from for the first eight months of 2015 was 76.6 percent.

 


MEA said it inaugurated a simulator center, to be known as the Middle East Aviation Academy, in March and a cargo center in May. MEA celebrated its 70th anniversary in May.

 


Also in May, MEA placed an order for one midsize Legacy 500 with an option for one more, with delivery scheduled by the end of this year. Announcing the deal, Embraer Executive Jets said MEA was establishing a business jet company to offer charter flights, based out of Beirut’s Rafik Hariri International Airport. The Cedar Executive Company for private jets is to start operation in December 2015.

 


Former EgyptAir CEO Hossam Kamel was promoted to the position of Minister for Civil Aviation shortly after attending the Dubai Airshow in 2013. He told AIN then that he was planning major EgyptAir orders imminently, but these do not appear to have materialized, as the Egyptian economy continues to struggle.

 


Royal Air Maroc (RAM) has been feeling the effects of global competition, as EasyJet and Air Arabia of Sharjah have set up hubs in Casablanca. RAM’s fleet is composed of 53 aircraft, including 30 Boeing 737-800s and two 737-8s, according to its website. However, CAPA said it took its first 787-8 in January, and was scheduled to take two more in March, with two additional units in 2016 and 2017. In June, Tunisair, took delivery of its first A330-200.

 


In September, Dubai-based Flydubai received its 50th aircraft with delivery of the final Boeing 737-800of an order placed at the Farnborough Air Show in 2008. In 2013, Flydubai ordered 111 Boeing aircraft. It will take eleven 737-800s between 2016 and 2017, followed by one hundred 737 Max aircraft between 2017 and 2023.

 


Flydubai has a network of 94 destinations, with 18 new routes added since the start of this year. It flies to 59 routes that did not previously have direct air links to Dubai.

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