Jetrader - Winter 2014 - 27

Source: IATA

Source: IATA

latest annual report, the net profit generated was AED 3.25 billion
or US$900 million. All the other airlines in the region were simply
off-setting each other's net profits and losses.
The interesting corollary to the absolute figure, however, is
that the Middle East region is forecast by IATA to produce a net
profit of US$8.98 per passenger in 2014, which is second only to
North America at US$11.09 and way above Europe (US$3.23) and
Asia-Pacific (US$2.98). There are a number of reasons for this
relatively high unit profitability, but the mainly long-haul network and widebody equipped full-service model of the Big Three
facilitates the provision of award-winning quality service that is
especially attractive to premium travelers.
Much to the annoyance, no doubt, of some long-established
flag-carriers in Europe and Asia, the Big Three Middle East airlines
have been adept in securing quite a lucrative share in the premium
market and their focus appears to be toward enhancing this with,
for example, delivery delays announced until new aircraft types
conform to the lavishly superior branding now demanded by these
world-class airlines that wish to maintain their elevated reputations.
With premium traffic only accounting for 10 percent of passengers
but more than 40 percent of revenues on flights between the Middle
East and Europe, it is no surprise that the first A380 sectors for
Emirates, Qatar and Etihad have been/will be to London.

airport developments in key "money no object" locations coupled
with a rapid decision-making political system allowing huge
growth potential to be exploited. This is happening in Doha, Dubai
and Abu Dhabi where there is plenty of underutilized land that
can be turned into the mega-hubs of the future. Dubai's (DXB)
International airport was the fastest growing top 10 airport during
2013 in terms of total passengers, according to Airports Council
International (ACI), with year-on-year growth of 15.2 percent. In
the first half of 2014, DXB went from seventh to fourth place with
a further 6.2 percent growth, even though this was constrained
by runway maintenance during May and June.
Similarly, Abu Dhabi airport has just announced a 24.8 percent annual growth rate for August, and Doha's new Hamad
International Airport has twice the capacity of the former Doha
International. Although it's just the other side of the regional
border, Istanbul and THY are also playing the Big Three at their
own game with rapid expansion and a transfer traffic philosophy
using a strategically convenient global hub with, in this case,
the added advantage of a reasonably large domestic population. Istanbul was another star performer in ACI's top airports
survey with 2013 growth of 13.6 percent and 18th place in the
world ranking.

Infrastructure

The "smaller than you might think" tag in the title of this article
alludes to the fact that airlines in the Middle East only account
for approximately 4 percent of the world's airliners according to
the latest survey by Flightglobal. It is easy to forget that the
Big Three airlines have all been around for less than 30 years and
all evolved in one way or another from the pioneering Gulf Air
multinational partnership. The combined fleets of the Big Three
at 443 aircraft account for about 45 percent of these 4 percent,
so their dominant impact on the region's air transport statistics
is understandable and growing. Looking at the orderbooks for
Airbus and Boeing alone, the Middle East carriers have made a
serious declaration as to future intent, which will have many of the
world's long-haul airlines, in particular, sitting up and taking note.
On the single-aisle side, the backlog for A320 family (ceo
and neo) and B737 (NG and MAX) aircraft is in proportion to
the existing aircraft population at a fraction under 4 percent.
However, in the twin-aisle category, the region's airlines have
an aggregate interest in more than 50 percent of the largest

Airlines can't grow without a corresponding expansion of
infrastructure, and the Middle East is again the pace-setter with

Source: ACI

Fleet

Jetrader  *  Winter 2014 27
Jetrader - Winter 2014

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