Slowed Growth For Gulf Carriers?

Gulf airlines Emirates, Etihad and Qatar have slowed their expansion, even as debate over the carriers within the U.S. has heated up in the first few weeks of the Trump administration.

Scheduling data provided by aviation data analytics company OAG shows that during the second quarter of this year Etihad will fly 4.6% more seats than it did last year, a substantial slowing of growth compared with the three previous years, when the airline expanded its available seats by at least 14% per year.

Similarly, Qatar will offer 8.6% more capacity this spring than it did last spring, but that’s compared with 21.6% growth the previous year. Emirates’ year-over-year growth in seat capacity is predicted to be 8.9% this spring, down from 10.4% a year earlier and sharply down from the 20% expansion the airline experienced between the springs of 2014 and 2015.

Slowed expansion at Emirates parallels a drop in profits. During the first half of its current fiscal year, which ends in March, Emirates reported net profit of $214 million, down 75% year over year.

A strong dollar, increased competition and general worldwide economic malaise played a role in the decline, Emirates said when it released the results in November.

As a Gulf airline, Emirates is also especially susceptible to demand drop-offs from the struggling oil sector.

Qatar and Etihad did not release midyear financial statements and declined to comment on their financial results in the fiscal year. But they are subject to the same overall market trends as Emirates, said Seth Kaplan, managing partner of the newsletter Airline Weekly.

“Our informed speculation is that however poorly Emirates is doing, the others are doing worse,” Kaplan said, noting that Emirates, the largest of the Gulf carriers, benefits from having its hub in Dubai, where it derives more business from locally originating traffic than Qatar and Etihad do in Doha and Abu Dhabi, respectively.

Emirates set off a maelstrom of criticism from Delta, United and American as well as U.S. airline labor unions when it announced plans in late January to begin flying between Newark and Athens this spring. Opponents accuse Emirates, Qatar and Etihad of accepting state subsidies in violation of international open skies aviation agreements, and they acknowledge that they are especially concerned about the Gulf carriers’ expansion into U.S.-Europe routes.

But while Emirates said in an emailed statement to Travel Weekly that it still considers the U.S. “to be one of our most important growth markets globally,” it appears that a period of rapid U.S. expansion among the Gulf carriers has simmered down.

Of the combined 28 routes the carriers fly to the U.S., 14 began between 2012 and 2014, according to an Airline Weekly analysis of flight schedule records from the aviation data company Diio.

Gulf airlines have launched just four routes since then, with the Doha-Las Vegas and Athens-Newark services in the offing.

Source:, 14 February 2017

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