Transport

IATA says Dubai woes will not affect expansion of industry in region

The International Air Transport Association (IATA) said in December that the immediate troubles of Dubai are unlikely to affect the expansion of the industry in the region. IATA Chief Economist Brian Pearce said that the airlines in the region can benefit from the patches of strong growth in Asia and other parts of the world. He stressed that the situation in Dubai does not look severe as it did several weeks ago after the Abu Dhabi bailed out Dubai's debt. IATA's Director General Giovanni Bisigani said that Middle Eastern carriers will cut losses to US$300 million. Globally Pearce said that operating profits are expected to turn positive in 2010 but at less than one per cent of revenues and that this margin is well below even mid-cycle levels. Pearce said that the 2000s has been the toughest decade for the industry ever with eight out of 10 years in loss, as a result of successive shocks from 9-11, SARS, the oil price shock and the Great Recession. According to IATA estimates the expectation of net losses stands at US$11 billion in 2009, and prospects for 2010 have become less positive, the IATA forecast for net losses has been raised for 2010 from US$3.8 billion to US$5.6 billion. Bisigani described the period between 2000 and 2009 in the airline industry as the horrible decade with losses of USD 49.1 billion, an average of US$5 billion per year. For 2010, he stressed that demand will likely continue to improve and airlines are expected to drive down non-fuel unit costs by 1.3 per cent.

BIA first phase to be completed in 2011

The Bahrain Airport Company (BAC) has clarified that the first phase of the airport expansion project will be completed in 2011. "All the phases of expansion of the Bahrain International Airport (BIA) will be completed by 2038," a BAC spokesman said. The expansion includes a new general aviation terminal, a new cargo terminal capable of handling 1.5 million tons of cargo in place of the current 350,000 tons, a people mover system, a road network expansion (future expansions to the existing runway) and utilities infrastructure, he said. The expansion will triple the passenger capacity to 27 million a year. Terminal Two will be commissioned by 2012 and Terminal 1A will become operational a year later, BAC chief executive officer Dr Osama Alali said recently.

Gulf Air faces a stormy future

The battle for control of the Gulf's skies has claimed its first casualty. Gulf Air, the Bahrain-based carrier, has effectively given up its fight with Emirates, Etihad and Qatar Airways by changing its focus from long haul to regional flights. The problem for Gulf Air, which at 60 is the region's oldest airline, is that it has been up against rivals who are engaged in an aviation arms race. Emirates, Etihad and Qatar have been growing rapidly, adding new planes, new routes and increasing passenger numbers by the millions. The strategy that all these carriers have been following was pioneered locally by Emirates and then copied by everyone else. The idea is to use the Gulf's geographic location as the crossroads between east and west, north and south to create a hub for transferring international passengers. Advances in aircraft design mean that passengers can connect from pretty much anywhere in the world to anywhere else via the Gulf with just one stop.