Industry forges ahead despite civil disruption.

Author:Seymour, Richard
Position::Business: AVIATION REPORT
 
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The world's aviation industry suffered greatly amid the global recession, but airlines in the Middle East bucked that trend somewhat. However, the recent instability in the Middle East and North Africa (MENA) region is a threat to the region's airlines that it may have more difficulty riding out.

The MENA region is still one of the fastest-growing sectors for the world's aviation industry. But with almost 80 carriers operating flights to Egypt alone, the impact of that one uprising was felt everywhere.

The main aim of the protesters, that of President Mubarak stepping down, was fulfilled relatively quickly, but political uncertainty remains. Time will tell how soon tourists will start returning, and that will be a nervous wait for the airlines in what is, at the best of times, a difficult business.

Egyptair will, naturally, be hardest hit, with 40% of its fleet grounded. The airline carries more than a third of all passengers in and out of the country. Reports are that it is looking to offset its losses brought about by the unrest by leasing its newest aircraft to rivals along with cabin crew.

Almost all airlines in the Middle East have seen their share value forced down in recent weeks. Royal Jordanian and Kuwait National Airways have been particularly hit. And the president of Emirates, the Dubai-based airline, Tim Clark, was reported by Dow Jones as saying the unsettled political situation in the Middle East had seen its passenger numbers fall to 75% from the expected level for this time of year of 8z%.

He added, however, that the airline's financial position was such that it could absorb the losses and that he expected numbers to return to normal by this month (April).

Current unrest

But with civil unrest spreading across the region, it is unlikely that any such prediction can be relied upon.

It is not just the countries featuring in the news with images of violent demonstrations being beamed around the world. The perception that many people have of the region as being unstable will only be reinforced and even countries which are trouble free, like the UAE, can expect to notice a drop in passenger numbers for a while.

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MENA countries have doubled their market share of world aviation in the last 10 years thanks to policies of capacity expansion and heavy investment, especially in the Gulf. MENA's combined GDP is the fourth largest in the world, and with civil unrest, to a greater or lesser extent, from Lebanon to...

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