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Flying high

posted on 02/12/2006: 1857 views

The aviation industry is heading in the right direction, spurring hope that it could return to prosperity in 2007 after years of losses.

At the beginning of the year all seemed rosy for the aviation industry. On the first day of the year, the International Air Transport Association (IATA) said Middle East air carriers recorded the highest growth rates for passenger and freight traffic in 2005.

It also highlighted the region as one of the three worldwide, along with Europe and Asia, not to have lost money.

At the close of 2005, airline load factors worldwide were the highest since 2003, spurring hope that the industry could return to prosperity sometime in 2007 after years of losses.

Emirates airline started the year by announcing service to the Ethiopian capital Addis Ababa, adding it to the 78 other cities in its network of destinations. At the time company officials proudly sketched out the rollout of several new gateways through the year including Abidjan in Africa, Thiruvananthapuram and Calcutta on the Indian sub-continent, Hamburg in Europe, and Nagoya and Beijing in the Far East.

While Emirates did expand its schedule of routes in impressive form, industry observers will mark 2006 as the year its meteoric rise was held in check by an unlikely source: Airbus.

Emirates this year was to finally realise the full extent of its ambitious expansion plans when it was to take delivery of its new superjumbo workhorse, the A380.

In 2003 the airline placed firm orders for 43 of the A380 passenger and two A380F freighter versions, and Airbus was set to deliver its first planes in mid-year.

But construction delays at Airbus mean the Dubai-based carrier will not receive its first delivery until August 2008. The implications of the delay are enormous for Emirates, Airbus' largest customer, whose order book of Dh50 billion represents nearly a third of the firm's A380 orders.

The Dh15 billion expansion of Dubai International Airport, Emirates' hub, was planned in accordance with the scheduled delivery of the superjumbos. And the Department of Civil Aviation had invested in upgrading two passenger gates at the Sheikh Rashid Terminal to accommodate the double-deckers, and five more gates are being readied in Concourse 2.

The delays may help rival aircraft builder Boeing slingshot past Airbus after years of trailing behind in both planes ordered and planes delivered. In September Emirates signed for up to 20 747-8F cargo planes from Boeing, and recently the Chicago-based plane-maker predicted it would finally sell more planes than Airbus in 2006.

And while the A380 delay may trouble Emirates, the interruption has no chance of slowing the growth of the carrier or the region's aviation industry.

Emirates may well eclipse Saudi Arabian Airlines in terms of fleet size and passenger traffic in 2006 as it expects to take delivery of its 100th plane next month.

Saudi Arabian is also facing pressure elsewhere, as the Saudi government plans to award two licences for low-cost carriers in the kingdom under its air transport liberalisation plan.

RAK Airways launch

This is the year RAK Airways announced it would become the fourth national carrier of the UAE operating out of Ras Al Khaimah Airport. As the company approaches a January 2007 launch, company CEO Jack Romero has restructured the airlines business plan away from a low-cost carrier to favour a full-service, two-class fare structure.

With launch date months away, RAK Airways is making preparations: building its staff, negotiating contracts and preparing for the first flights to Iran and India, and soon after that to the former CIS countries.

Also this year, Dubai Aerospace Enterprises (DAE), the US$15 billion conglomerate designed to mould Dubai into a world hub of the aviation industry, said it plans to purchase the first of about 50 planes to develop its aircraft leasing division.

Elite Jets, a new charter business and exclusive seller of Beechcraft and Hawker aircraft from American avionics firm Raytheon, this month launched out of Dubai's new VIP terminal.

All this regional growth has led the IATA to revise its estimate for industry-wide performance for the year, proclaiming in October that the worldwide aviation industry was just months away from climbing back into the black. (Gulf News)


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