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Arab Air Carriers Organisation report progress on Middle East liberalisation - Middle East Aviation Outlook Summit Highlights

Arab Air Carriers Organisation report progress on Middle East liberalisation - Middle East Aviation Outlook Summit Highlights
The Arab Air Carriers Organisation (AACO) stated that the Middle East region is making progress on the development of intra-regional aviation liberalisation. Secretary General, Abdul Wahab Teffaha, stated, aviation is one of the last bastions of protectionism [in the Middle East]. However, the defences of liberalisation are coming down. Even Saudi Arabia and Egypt, the supposed ‘fortresses’ of the region are liberalising. However, there are some structural barriers; capacity constraints at airports, eg Jeddah and seasonal religious traffic cycles. So liberalisation will continue incrementally and cautiously.

Meanwhile Etihad Airways CEO, James Hogan, called for Middle East carriers to make profitability – not just growth – a “key development focus”. IATA forecasts Middle East carriers will generate USD300 million in profit in 2008.

Mr Hogan stated, “can the Middle East become the centre of global aviation? Yes. There is a multi-layered formula for success; Progressive deregulation and liberalisation, with regional authorities becoming more and more active in the process; The ‘East West’ bridge, leveraging the region’s geographic position; The arrival of long-haul and ultra long haul aircraft is facilitating this geographic position. All CEOs in the region have confidence that the region can sustain strong levels of growth”.

Etihad has also released a report stating the airline contributed to 6.6% of Abu Dhabi’s non-oil GDP in 2007, and helped generate or support 5% of non-oil jobs throughout the Emirate.

Kuwait LCC, Jazeera Airways' VP for Industry Affairs, Bader Al Mershed, forecasts that network airlines in the Middle East will develop LCC subsidiaries in response to rising LCC competition in the region. He stated, "five years from now, many [Middle East] legacy carriers will own a LCC".

(c) Centre for Asia Pacific Aviation. Date posted: 29-Feb-08
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