THE FUTURE FOR THE MIDDLE EAST

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By TESTCustomwebLP TESTCustomwebLP May 12, 2011 09:15

THE FUTURE FOR THE MIDDLE EAST

As Emirates posted its impressive profit figures this week we have to wonder what the future holds for the already huge and rapidly expanding airlines of the Middle Eastern region. Recent revolutions across North Africa and the ongoing attempts throughout the Middle East are impacting on business for the regions airlines. Emirates will tell you that it is a global airline and as such political unrest in its home region is of no more impact than it is for say a European airline. But, as with all things, if we look that little bit closer then we can see that events stand on a knife edge.

Egypt, as an example stands somewhere between total chaos and a military government – ironically not dissimilar to the one it ousted in March. Recent sectarian attacks in the city of Cairo have shown that a significant amount of the population is hardening along religious divides, usually a precursor to civil war or at least a generation of mistrust. With elections promised and the main party in the country being the Muslim Brotherhood you have to wonder what the future holds. If Egypt falls further into unrest then so too will the region. This will in turn mean that Israel could be surrounded by what it would class as potential enemies leading to an arms build-up once again.

Tourism to all countries in North Africa and the Middle East is well down on last year with some holiday firms saying that bookings to the UAE are less than half of what they were this time last year. So will the Middle East need all these aircraft on order and that Boeing predicted last week? Only if they are using a business model that lets them be the world’s global airlines by having slots and strategic bases everywhere. The problem for the Middle Eastern airlines is that the old legacy airlines of Europe, APAC and the US, through consolidation, are now catching up fast and getting their act together. I think that the huge merged airlines coming forward from the US and Europe will be able to control enough routes, at prices low enough, to prevent a global model such as that of Emirates from working in profit by 2020 meaning that the Middle East either becomes a global hub or things will not work out the way they are being planned. This of course brings us back to the question of Middle Eastern stability and the fact that the clock is being turned back to the 1960s at speed. Emirates and the like could become aircraft lessors on the side in the future just as Jet airways has.

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By TESTCustomwebLP TESTCustomwebLP May 12, 2011 09:15
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