An inconvenient truth

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Having spent more than 200,000 man hours investigating battery fires on its grounded fleet of 787 Dreamliners, US airframe manufacturer Boeing is confident that a series of re-designs will allow the aircraft to resume flying within weeks. A three-layered approach to combatting the safety scare has delivered a "comprehensive set of solutions" that will ensure battery failures never endanger the safe operation of 787 flights, Boeing insisted in March.

But its proposed measures must first be approved by the US Federal Aviation Authority (FAA). The regulator has to date only rubber-stamped Boeing's certification plan – a "first step in the process to evaluate the 787’s return" that is contingent on "extensive testing and analysis". Even if the aircraft does return to the skies promptly, Boeing's admission that it "may never get to a single root cause" of the recent battery fires will rattle nerves among some passengers...

Interview: Richard Nuttall, Bahrain Air CEO

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The collapse of Bahrain Air in February was yet another grim milestone in the kingdom’s faltering efforts to reform its civil aviation sector. With flag carrier Gulf Air having narrowly averted its own closure last autumn, doubts are growing about the long-term contribution that Bahrain can make to a regional sector now dominated by mega-hubs in the United Arab Emirates (UAE) and Qatar.

Bahrain Air, a low-cost carrier servicing routes across the Middle East and South Asia, filed for voluntary liquidation on 12 February. Announcing its closure after just five years in business, the airline heaped criticism on Bahraini transport minister Kamal Ahmed, whom it accused of having a conflict of interest due to his parallel role on the board of Gulf Air. It also reiterated criticism of the government’s alleged failure to provide compensation for difficulties encountered during the Arab Spring...

Etihad's calculated gamble

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The appointment of Wolfgang Prock-Schauer to the role of chief executive at airberlin last month, though unexpected, was by no means a complete surprise. His predecessor, Hartmut Mehdorn, 70, had been hired on an interim basis in September 2011 – shortly before Abu Dhabi's Etihad Airways acquired 29 per cent of the German carrier, becoming its largest stakeholder – and local media reports consistently painted a picture of strained relations with the new Gulf investor.

Even so, Prock-Schauer’s rapid ascension to the top job is yet another sign of seismic changes at airberlin since Etihad chief executive James Hogan invested in the troubled carrier...

GACA slams on the brakes

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The recent decision by GACA, Saudi Arabia's civil aviation authority, to delay awarding new domestic air licences came as little surprise to people familiar with the kingdom's heavily regulated, duopolistic market. The much-vaunted liberalisation process had advanced as far seven bidders being shortlisted - among them consortia comprising Gulf Air, Bahrain Air and Qatar Airways - but it became clear that the familiar stumbling block of regulatory price intervention was hindering a deal.

"GACA needs more time to choose the best operating models after it completes the analysis and evaluation of the bids that were received from the companies," the authority said in late November, making no reference to the widely reported withdrawal of several bids in protest at the country's domestic fare cap. Earlier that month, GACA had insisted it was in the final stages of issuing the licences...

Air Arabia spreading wings

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When Air Arabia was founded in 2003, the low-cost carrier (LCC) model pioneered by European airlines such as Ryanair and EasyJet was practically unheard of in the Middle East.

But in less than a decade, the Sharjah-based carrier has grown to serve more than 80 destinations with a fleet of 26 Airbus A320s. Though handicapped by heavily regulated skies, Air Arabia's dual focus on under-served eastern European markets and labour corridors with the Indian subcontinent is bearing fruit...

Swimming with the big fish

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When RAK Airways re-launched in 2010 – having been grounded after just two years of operations – many in the aviation industry were sceptical of its pledge to carve a niche between the full-service and low-cost carrier sectors.

The saturated Gulf aviation market had already seen years of double-digit growth, with Dubai's Emirates Airlines and Abu Dhabi's Etihad Airways transforming the United Arab Emirates (UAE) into the world's pre-eminent intercontinental hub. On the lower end of the market, Sharjah-based Air Arabia and FlyDubai were fast hoovering up point-to-point traffic across the region.

But in the northernmost emirate of Ras Al Khaimah – where annual air passenger numbers of 328,000 pale in comparison to Dubai's 51 million – RAK Airways chief executive John Brayford is proving the naysayers wrong, charting an expansion strategy that complements rather than competes with his dominant neighbours to the south...

Kuwait Airways privatisation up in the air

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In July, an Airbus A300 operated by Kuwait Airways made an emergency landing in Medina, Saudi Arabia, after what appears to have been a potentially catastrophic double engine failure. Camera-phone footage of the incident shows passengers clinging onto their armrests and nervously reciting the Shahada, as the only functioning engine sputters in the background.

Far from an isolated incident, this latest in a string of security scares renewed concerns about whether the airline’s ageing jets should remain in the skies while Kuwait’s parliament drags its feet over sorely-needed restructuring – originally promised in a 2008 privatisation bill...

Doing business Down Under

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Emirates Airline, the flag carrier of Dubai, this summer announced that a code share partnership with Australia’s Qantas is likely to be signed within months.

The move follows the decision by Etihad Airways, Abu Dhabi’s flag carrier, to increase its equity stake in Virgin Australia to 10 per cent. It also comes as Qatar Airways voices renewed interest in Australia. Taken together, the hubbub spells a new phase in the long-running tussle between the Gulf carriers and their western counterparts for supremacy over inter-continental traffic flows...

Cracking up

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On 4 November 2010, in the skies above the Indonesian island of Batam, one of the four engines powering an Airbus A380 operated by Australian flag carrier Qantas blew up mid-flight. The force of the explosion was so great that shrapnel from the Rolls-Royce Trent 900 engine punctured the wing, sent fuel gushing from two tanks, and disabled an array of vital flight control systems.

Despite malfunctioning hydraulics, limited reverse thrust and no anti-skid brakes, Captain Richard de Crespigny successfully landed Qantas Flight 32 at Singapore Changi Airport. None of the 440 passengers and 29 crew aboard was injured.

In the months that followed, air safety investigators branched out from focusing solely on the faulty engine to addressing a new issue of concern – the discovery of hairline cracks in the Qantas A380’s wings. Though not a contributing factor to the mid-air explosion, it quickly became apparent that these newly identified fissures – located on nine-inch aluminium brackets connecting the wing’s outer skin to its inner rib structures – warranted further scrutiny...

Gambling with a clear game plan

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In its 2006/07 annual report, Dubai-based Emirates Airline proudly announced that its “fuel risk management programme” – more accurately described as an oil hedging strategy – had delivered savings of $197 million against spot prices for jet fuel. Gary Chapman, president of group services at the carrier, said the programme had saved Emirates $1 billion over eight years.

One year later, on the precipice of the worst financial crisis in living memory, the airline vowed that it would continue to “achieve a level of control over jet fuel costs so that profitability is not adversely affected” by volatile market prices.

It failed to do so. By the time Emirates’ 2008/09 report was being audited by PricewaterhouseCoopers, the company had written down annual fuel hedging losses of Dhs1.57 billion ($428 million). It may have succeeded in positioning itself defensively against higher oil prices, but it did not mitigate the downside risk of a price crash, which inevitably accompanied the global recession. The mistake was repeated in airline boardrooms around the world...

Winds of change

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For a man more accustomed to castigating his European rivals, Akbar al Baker, the chief executive of Qatar Airways, caught many observers off guard at this year's Arabian Travel Market. Far from berating Willie Walsh, the CEO of British Airways, al Baker heaped praise on his competitor, describing him as a "good friend" and hailing his uncompromising management style.

“I respect what he did for British Airways,” the Qatari fawned, in reference to the 2010 cabin crew strikes. “He stood up to the unions and won at a very difficult time. And he doesn’t badmouth the competition. I always say that if you cannot defeat someone, you should make an ally of them.”

Al Baker’s conspicuously chummy tone did not come entirely out of the blue. Walsh, in contrast to many European counterparts, has long given credit to the Gulf carriers. Two years ago, for example, he accused neighbouring legacy airlines of preferring to “bitch and moan” about Gulf competitors, rather than getting their own houses in order. But even so, camaraderie between the Gulf and Europe has until recently been a rare sight in aviation circles...

Qatar making a noise

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Speaking at the Global Aerospace Summit in Abu Dhabi last month, Akbar al Baker, the chief executive of Qatar Airways, surprised no-one when he announced that the flag carrier expects to double in size by 2020. While that prediction would be met with derision if uttered by one of Europe or North America’s legacy airline bosses, Qatar has for years been staking its claim in the rising fortunes of the Gulf aviation market.

From its humble beginnings in 1994, when it started operations with a wet-leased Boeing 767, Qatar Airways has lived up to the emirate’s reputation for punching above its weight...

Saudia looks for direction

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Despite being the Middle East’s third largest carrier by revenue, Saudi Arabian Airlines, or Saudia as it is often still known, rarely features in discussions about Gulf aviation. The kingdom’s flag carrier has a reputation for shying away from the limelight, due in part to its beleaguered domestic market, and in part to the pre-eminence of more media-savvy rivals in the United Arab Emirates (UAE) and Qatar.

This coming year, however, Saudia will throw itself onto the global stage like never before. Against a backdrop of gradual privatisation, the airline will join the SkyTeam airline alliance in May – kick-starting a strategic plan which, if successful, will see business travellers in the Americas, Asia and Europe fuelling profitability...

Still waiting for the tide to turn

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Bahraini flag carrier Gulf Air has made no secret of its desire to cut underperforming routes, nor has it downplayed the impact of the Arab Spring on its operations. Even so, last month’s culling of four more destinations from the airline’s route network – Athens, Milan, Kuala Lumpur and Damascus – caught many observers by surprise. Set against a backdrop of intense parliamentary scrutiny that has at times bordered on enmity, some are beginning to ask questions about its future.

There is no denying Gulf Air had a torrid time in 2011. Bookings fell by 25 per cent in the first five months of the year as regional unrest spooked foreigners and parliament banned flights to Iran, Iraq and Lebanon – fearful that groups like Hezbollah might antagonise the country’s Shia population. Factor in high oil prices, and it is little wonder that Gulf Air’s much-lauded recovery plan, which had targeted profitability by 2013, was aborted in January...

Headwinds over Europe: ETS

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Last month, Malaysian low-cost carrier AirAsia X called time on its flagship services to Europe, under the pretext that the continent’s Emissions Trading Scheme (ETS) – essentially an environmental tax – had made flying to London and Paris unprofitable.

Behind the whitewashed press release, its hand was in truth forced by the short-sightedness of a business plan conceived in 2009, when oil prices stood at just $40 per barrel. With Brent crude surging to three times that level in recent months, the viability of a low-cost, long-haul product – absent of any high-yielding corporate passengers – was well and truly blown out of the water.

But while blaming the ETS was undoubtedly a face-saving exercise, AirAsia X will have many sympathisers both within the industry and beyond. Europe’s carbon trading scheme has been an unremitting source of contention for foreign governments, who say the tax violates their sovereignty and who are increasingly talking up the prospects of a trade war...

Interview: Peter Hill, Oman Air CEO

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After 50 years in the industry, Oman Air chief executive Peter Hill recently hung up his flight jacket for the last time. Though his successor has yet to be announced, Hill leaves the flag carrier with a well-defined “luxury boutique” business plan that will nurture the Sultanate’s tourism sector and help articulate its identity within the Gulf region.

As a founding member of Dubai’s Emirates Airline, Hill was headhunted by Oman Air four years ago to develop the plan begun by his predecessor, Ziad al Haremi, who had died tragically of a heart attack. In contrast to the mega-hub strategy Hill advanced in Dubai, the flight path for the Muscat-based carrier focused on selective long-haul expansion and a bespoke in-flight service that, in his words, “the bigger boys just can’t offer”...

Iran Air: shackled by sanctions

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In October, one of Iran Air’s 40 year-old Boeing 727s was filmed making an emergency landing at Tehran Mehrabad Airport. Banned from European Union (EU) airspace, the plane was on a return flight from Moscow when its front landing gear failed to deploy. After skidding to a halt on the runway, all 113 people on board were safely evacuated and the flag carrier vowed to repair its geriatric jet.

Sadly for Iranians, incidents such as this are hardly rare. More than 700 nationals have died in 13 crashes over the past six years, including 77 in January when another of Iran Air’s 727s crashed while trying to land in the north-western city of Urumiyeh...

Interview: Simon Stewart, Nas Air CEO

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Four years after Saudi Arabia liberalised its aviation sector, Simon Stewart, chief executive of the only surviving private carrier, Nas Air, remains optimistic about the “vast potential” for air transport in the kingdom. Ask him about the progress to date, however, and the former army pilot pulls no punches. “Saudi aviation is pretty much structured as it was in the old legacy days,” he admits, and he doesn’t expect things to change overnight.

Low-cost carrier Nas Air was created in 2007 along with another private airline, Sama, to end the domestic monopoly of flag carrier Saudi Arabian Airlines. It was hoped the new license-holders would mimic the success of Jazeera Airways, which grew rapidly after the Kuwaiti aviation sector was liberalised in 2005...

Flying into the unknown

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“An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen,” wrote the late US educator Laurence Peter. His words ring as true today as ever before, with the world’s brightest economic minds showing little aptitude for diagnosing – let alone remedying – the perfect storm of a European debt crisis, a stagnating US economy, and political upheaval across the Arab world.

And yet while meaningful forecasts elude the experts, the simplest of litmus tests is available to anyone by looking up, towards the skies, at the air transport sector – the lifeblood of the global economy...

Wing and a prayer

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In August, the Air Transport Rating Agency (ATRA) published a list of what it claimed are the ten safest airlines in the world. The Geneva-based company, which was founded earlier this year, said it arrived at the holistic safety rating through a combined analysis of 15 criteria, incorporating factors as disparate as financial results and average fleet age.

Some analysts were quick to cast doubt on its methodology, arguing that previous studies have found no correlation between accident rates and several of the criteria used. Others also noted the conspicuous absence of any Gulf carriers on its list, despite the fact that the region’s three largest airlines – Emirates, Etihad and Qatar Airways – have never recorded a fatal incident in their, admittedly brief, histories...