It has been a tumultuous year in the Middle East. The major shock that has affected the airline industry, stem- ming from a wider political problem, has been the ongoing blockade of Qatar by Saudi Arabia, the UAE, Bahrain and Egypt. The cutting of air links has affected all the national airlines concerned. Bahrain’s Gulf Air, for example, has lost its
extremely short, but lucrative, hop to Doha, while
Egyptair’s chairman and CEO Safwat Musallam
lamented at Arab Air Carriers Organization AGM
in Sharjah that it had lost what he described as “a
golden route” between Cairo and the Qatari capital.
By far the greatest impact, however, has been on Qatar Airways. Nevertheless, the airline has been at pains to
strike a “business as normal” stance and has, if anything,
accelerated its program of opening new routes.
For Abu Dhabi’s Etihad, it has also been a difficult
year, but for different reasons. After the 2017 trauma of
the failure of equity partner airlines airberlin and Alitalia,
it has been reassessing its future direction. Te carrier recorded a “core loss”—equivalent to operating loss for its
day-to-day airline operations—of $1.5 billion in 2017,
narrowed from $1.95 billion in 2016.
Emirates emerged as by far the most successful of the
Gulf majors last year, recording a 2017-18 net profit of
more than $760 million, almost 125% up on the previous year.
Te past year has seen Emirates’ co-operation with
LCC flydubai grow, with greatly enhanced interchange
between their passenger flows and passengers able to
combine both airlines’ routes on a single ticket.
Even Emirates felt some strain, however, with some
Airbus A380s and Boeing 777s being parked in May be-
cause of a combination of slowing markets and a shortage
Te big developments of the year for the Gulf carriers,
however, were the UAE and Qatar agreements reached
with the US over Open Skies compliance and alleged
subsidies. Te Open Skies agreements remain fully intact,
including fifth freedom rights.
African traffic made a 12.7% growth comeback in the
first quarter, as commodity prices and key markets like
Egypt and Nigeria began their recovery. However, African
airlines are still struggling to find a firm footing.
Te standout performer continues to be Ethiopian Airlines, which is pressing ahead with its own route expansion, while also setting up a string of new joint-venture
(JV) airlines. Tis year, Ethiopian is planning to launch
airlines in Chad, Guinea, Mozambique and Zambia, adding to its existing JV airlines which include Togolese airline ASKY in West Africa and Lilongwe-based Malawian
Airlines in southern Africa.
South African Airways (SAA) continues to battle financial difficulties. In May, the South African government agreed to a further R5 billion ($407 million) cash
injection, the latest in a series of bailouts, after it tripled
losses to ZAR5.4 billion ($438 million) for 2016-17.
Meanwhile, loss-making Kenya Airways is going
through a financial restructuring, headed by former LOT
Polish Airlines CEO Sebastian Mikosz.
2018 saw the launch of Africa’s Single African Air
Transport Market (SAATM), which could be the regulatory shift that changes Africa’s fortunes, although many
are pessimistic. Still, 26 countries have committed to liberalization and 14 of these took early steps to turn this
commitment into reality.
Some bright spots in a challenging landscape.
BY ALAN DRON & VICTORIA MOORES
ANALYSIS: MIDDLE EAST & AFRICA