Low-cost carriers to boost Mideast aviation market
Low-cost carriers (LCCs) are driving growth in the Middle East aviation market, recording a 9.3 per cent increase in seat capacity in 2019, according to CAPA - Centre for Aviation. LCCs’ share of total seat capacity across the Middle East increased from 14.9 per cent in 2018 to 16.5 per cent in 2019, with a larger share of the region’s airline passengers now opting to fly with no-frills airlines in more modest and affordable cabin surroundings.
Over the next 12 months, LCCs are predicted to continue to chip away at their bigger rivals’ market share, with Saudia’s LCC subsidiary, flyadeal, leading this trend – becoming the region’s largest airline by seats in 2019 and recording a capacity growth of 78.1 per cent, according to the latest CAPA data.
The Omani LCC SalamAir continues to chart a brisk growth by spreading its wings as far as Southeast Asia (Phuket), apart from international destinations such as Abu Dubai, Dubai, Bahrain, Kuwait, Doha, Jeddah, Riyadh, Dammam, Tehran, Shiraz, Istanbul, Alexandria, Khartoum, Multan, Sialkot, Karachi, Dhaka, Chattogram, Kathmandu, and Colombo. In the first five months of 2019, the company had a 100 per cent increase in revenues, with the number of passengers doubled when compared to the same period in 2018. The company operates three Airbus A320 and four Airbus A320neo aircraft.
Arabian Travel Market (ATM), which takes place at Dubai World Trade Centre from April 19-22, 2020, is witnessing this trend with many LCCs confirmed for the 2020 edition of the show. Danielle Curtis, exhibition director ME, Arabian Travel Market, said, “Situated within eight hours of two-thirds of the world’s population and located between the major cities of Europe in the northwest, the fast-developing East African cities in the west and India and Pakistan in the east – the Middle East is the ideal location to set up a budget airline, attracting passenger traffic from within the region as well as from across much of the eastern hemisphere.”
When compared to other parts of the world, there looks to be plenty of scope for growth for the Middle East’s LCCs. According to Boeing, 33 per cent of short-haul traffic globally is on no-frills airlines, led by southeast Asia where the figure is 62 per cent.
However, in the Middle East at present, this figure lies at 13 per cent. Supporting LCCs’ potential for growth in region, in October 2019, Air Arabia and Etihad Aviation Group announced strategic plans to launch a new budget carrier.
Based out of Abu Dhabi Airport, Air Arabia Abu Dhabi will become the fifth airline to operate in the UAE – and the capital’s first low-cost airline.
In the same month, Indian low-cost carrier SpiceJet announced plans to launch an airline that will be based at Ras al Khaimah (RAK) International Airport following the signing of an MoU with the airport to start direct flights between RAK and New Delhi.
Meanwhile, Wizz Air – a Hungarian low-cost carrier – and Abu Dhabi Developmental Holding Company announced in December that they had reached an ‘agreement in principle’ to set up a new airline based in the UAE capital.
Curtis said, “The rise of LCCs in the region appears to be bringing some fresh momentum to the aviation industry, with research predicting 50 per cent of airline traffic to be on routes of less than 2,000 miles by 2038, a trend which Airbus described as ‘fertile territory for the LCC business model’ in their most recent report.”