Middle East unrest keepts traffic pressure on

-
Source:
This story is sourced from Airline Business
Subscribe today »

Middle East carriers' revenue suffers as local troubles impact passenger numbers on flights in the region

The ongoing turmoil in parts of the Middle East and North Africa continues to affect airline traffic in the region, as IATA estimates the troubles resulted in a 1% loss in global traffic in February. While overall passenger traffic grew 6% and freight levels rose 2.3% in February over the same month in 2010, growth was sharply down over January's respective figures of 8.4% and 8.7% - although the fall in cargo also reflects factory shutdowns as the Chinese new year ran into February.

Passenger traffic growth for Middle East carriers slipped from 12% in January to 8.4% in February. IATA says political unrest in Bahrain, Yemen and Syria, representing around 6% of Middle East traffic, is expected to impact the region's markets in March.

Some local carriers have outlined the impact of the continuing unrest across the region. Qatar Airways chief executive Akbar Al Baker warns in this month's cover interview that the airline's financial performance in its 2010/11 fiscal year (ending 31 March) has been affected.

"The airline will be profitable, but it will not be that strong because the performance during last three months has been affected by the regional issues and the rising oil price," he says.

Ibrahim Abdulla Alhamer, chief executive of low-cost carrier Bahrain Air, says that revenue has fallen because of the events. "There has been a fall in traffic due to reluctance by of businessmen, workforce and visitors to travel to the region," he says.

Alhamer is dismayed at government directives against travel to the country and the wider Middle East, and also blames what he calls the "negative and exaggerated media coverage" about the events.

This has come at a time when the airline has suffered a drastic increase in costs, which, he says, "has reached more than 35% due to the increase in fuel and insurance at some airports, to the extent that the revenue from some destinations does not even cover the direct [operating] costs".

As a result, Alhamer says, Bahrain Air has been forced to reschedule flights on a minimum frequency to Damascus and Amman until June, and has suspended flights to Najaf, Baghdad, Beirut and Mashad.

Fellow Bahrain carrier Gulf Air has also suspended some services, including flights to Lebanon, Iran and Iraq.

Meanwhile Airbus has reportedly warned that the troubles could wipe out up to 40% of the 150 orders it had expected to secure from the region this year.