Why posting a 'very large loss' is a good sign for Qatar Airways

Full article on forbes.com

Never one to mince his words, Akbar Al Baker, the chief executive of Qatar Airways, has been more than candid about the “very large loss” that he expects his company to announce for the 2017-18 financial year. Qatar’s flag-carrier agreed in January to start putting detailed financial statements in the public domain – a move designed to ease concerns about unfair state support and minimize the likelihood of America curbing its access to the U.S. market.

The expected loss will mark a dramatic reversal of recent claims of profitability. For 2016-17, Qatar Airways had announced net profits of 1.97 billion Qatari riyals ($541m) in filings audited by Ernst & Young’s local branch in Qatar. The previous year’s audited report put its takings at 1.62 billion riyals, while an informal figure of $103 million was given by Al Baker for 2014-15.

As I wrote previously in relation to Etihad Airways – another state-owned Gulf carrier with delusions of profitability – such claims are misleading and should not have been repeated by media outlets without strong disclaimers...

Ukraine convinces Ryanair to return

Full article on economist.com

Almost one year ago to the day, Ryanair, Europe’s largest low-cost carrier, announced plans to begin serving Ukraine, its largest country. Ukraine had been a glaring white spot in the airline’s route network, deliberately avoided because of the anti-competitive advantages afforded to Ukraine International Airlines (UIA), the flag-carrier. A new infrastructure minister, Volodymyr Omelyan, brokered the deal between Ryanair and Boryspil Airport, the capital’s main gateway and home base of UIA. But it collapsed within months. Now, Ryanair, the government and the airport are trying again...

Come fly with Xi

Full article on economist.com

In ancient times, traders on the Silk Road connecting China with Europe rarely ventured into the northern Caucasus region that is now home to Georgia. Diverting from established routes through Armenia and Anatolia to the south served little purpose unless conflict made the trackways impassable. Today, advances in transport and logistics mean that geography is less of a hurdle for traders. But friendly relations are just as important. Having signed free trade agreements with China and the European Union, Georgia is keen to pitch itself as a trade-and-transport hub for President Xi Jinping of China’s One Belt One Road initiative...

Georgia's MyWay Airlines plans intercontinental hub in Tbilisi

Full article on forbes.com

The tiny Caucasian country of Georgia could become a hub for intercontinental transfer traffic if Chinese-owned MyWay Airlines fulfils its five-year business plan.

Igor Aptsiauri, the start-up’s commercial director, says capital city Tbilisi has geographical potential for linking up flights between Asia and Europe, but is held back by the modest ambitions of flag-carrier Georgian Airways – currently the only local carrier with scheduled passenger flights.

“One of our biggest strategies that we have right now is we want to develop Georgia and Tbilisi Airport … further as a hub connecting Europe and Asia,” he told me...

Ukraine's aviation fiasco

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Russia’s annexation of Crimea in 2014 opened a dark chapter in the history of Ukraine’s civil aviation sector, lighting a fuse that would see Donetsk International Airport razed to the ground and Malaysia Airlines Flight 17 shot out of the sky. Though hostilities rumble on in the eastern Donbas region, life has gradually returned to normal for most Ukrainians. The number of passengers carried by local airlines grew 22 per cent in 2016 to reach 5.7 million – just shy of pre-conflict levels – thanks in large part to flag-carrier Ukraine International Airlines (UIA), which has stepped up its role as a transit carrier linking Asia with Europe. Kyiv’s Boryspil International Airport, UIA’s home base, accommodated more than ten million passengers last year and expects 20 million by 2023.

However, market dominance by UIA – which provides 67 per cent of capacity at Boryspil, and a whopping 89 per cent of domestic seats nationwide – is antagonising Ukraine’s pro-western government, whose lawmakers are desperate to inject foreign competition and disempower the post-Soviet oligarchs...

How to ensure Ryanair foots the bill for flight delays

Full article on economist.com

There is little doubt that Ryanair takes umbrage at EU261, the piece of European law that guarantees passengers compensation in the event of most flight delays and cancellations. Michael O’Leary, the airline’s boss, insists that he complies with the “ridiculous” piece of legislation. But many say otherwise. Last year, when a pilot rostering mishap grounded thousands of Ryanair flights, the UK’s Civil Aviation Authority (CAA) accused it of “persistently misleading” customers about their rights. Which?, a British consumer group, agreed that Ryanair fell “woefully short” of its obligations. Media reports exposing poor treatment of passengers abound. Yet, in the past five months, your correspondent has received two EU261 pay-outs from Ryanair. Claims that the company swindles its customers are exaggerated...

Interview: Stefan Pichler, Royal Jordanian Airlines CEO

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When Royal Jordanian Airlines ran a series of advertisements mocking Donald Trump, the US President, and making light of his laptop ban for Middle Eastern flights, many of the people sharing its messages on social media had never even heard of the airline – let alone flown with it.

Despite flying its country’s flag for more than half a century, Royal Jordanian still lacks the scale and brand recognition of its Gulf competitors. It has also become a financial burden on the government of Jordan, its 26% shareholder, posting net losses in four of the six years since the Arab Spring.

New chief executive Stefan Pichler admits that regional instability has held the airline back. Neighbouring Syria used to be a major source of connecting traffic before civil war closed its skies, while routes to Iraq, Libya and Yemen were also abandoned when violence flared in their borders. Surrounded by conflict, Jordan’s own tourism sector has nosedived as Westerners steer clear of what they perceive to be a dangerous neighbourhood...

Interview: Ilyes Mnakbi, Tunisair CEO

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The European Union’s delegation to Tunisia could not have struck a more optimistic tone in December, when EU Transport Commissioner Violeta Bulc met with officials in Tunis to conclude negotiations over the looming Open Skies treaty between the two sides.

Tunisia’s government has been inching towards the treaty for several years, emboldened by the success of Morocco’s deal with the EU in 2006. That landmark agreement saw tourist arrivals rocketing by 60% over five years, propelled by an influx of European low-cost carriers to the country’s popular holiday resorts. Tunisia’s treaty, Bulc predicted, will be no less transformative...

Bridging the Gulf

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When SaudiGulf Airlines applied for an operating licence in the Kingdom of Saudi Arabia in 2012, owners Al Qahtani Group believed that a winning bid would grant them access to a heavily under-served duopolistic market.

By the end of the year, it was clear that SaudiGulf would not be the only company emerging from the tender process with flying rights. Al Maha Airways, a subsidiary of Qatar Airways, was also approved to launch operations. And while its plans ultimately came to naught, two other market entrants were waiting in the wings: Nesma Airlines, a regional carrier formerly based in Egypt; and Flyadeal, a low-cost subsidiary of flag-carrier Saudia.

Together with privately-owned Flynas, five separate carriers now ply routes across the kingdom. Though fantastic for passengers, this explosion of competition has left SaudiGulf re-evaluating a business model that presupposed rapid growth and untapped demand...

Legacy airlines are facing new competitors on transatlantic routes

Full article on economist.com

Even for a global industry like aviation, Primera Air’s business model seems remarkably cosmopolitan. The Icelandic-owned airline is headquartered in Latvia, but mainly operates flights from Denmark and Sweden to sunspots in the Mediterranean. This summer, it will begin flying from the UK and France to America. The company bears more than a passing resemblance to Norwegian Air Shuttle, another nominally Scandinavian airline with global aspirations. More than two-thirds of Norwegian’s capacity now bypasses its home country, and the rapid growth of its long-haul operations is proving to be a serious challenge for legacy carriers such as British Airways...