x Abu Dhabi, UAESunday 23 July 2017

A happy Christmas for Gulf airlines

Airlines are gearing up for a bumper festive season, barring a repeat of last year's icy weather which caused disruption across the industry.

Emirates Airline says there are no seats available for some of the destinations it services over the the Christmas season. Above, an Emirates aircraft is de-iced after heavy snowfall at Dusseldorf airport in Germany. Ina Fassbender / Reuters
Emirates Airline says there are no seats available for some of the destinations it services over the the Christmas season. Above, an Emirates aircraft is de-iced after heavy snowfall at Dusseldorf airport in Germany. Ina Fassbender / Reuters

A white Christmas heaped misery on millions of air travellers hoping to make a festive getaway last year.

The travel chaos caused by snow across a swathe of Europe and North America also caused financial pain for airlines as many were forced to redirect passengers or cancel flights.

This year, carriers are hoping the icy weather does not return to ruin what is shaping up to be a bumper festive season.

Despite other challenges posed by a patchy global economy, airlines are reporting stronger demand for travel during what is traditionally one of their busiest times.

Some, such as Emirates Airline and flydubai, are adding seats to cater for the rush.

"If the weather holds up there should be none of the financial bloodletting of last year," says Saj Ahmad, the chief analyst at StrategicAero Research.

"There's nothing really to suggest that any of the economic challenges are having any impact on Middle East carriers."

Bookings for festive season travel are up 18 per cent compared with last year, says Sunil D'Souza, the regional travel director at Kanoo Travel, which books air tickets for passengers travelling with Etihad Airways, Emirates and other global carriers.

"The booking trend this year is positive," he says. "There are less seats available then last year as many bookings have already been made six months or three months ago."

An improving economic outlook in the Gulf and longer holidays for some schools are encouraging expatriates to fly home or to holiday destinations, he says.

December is forecast to be a record month for Etihad, with 790,000 passengers predicted to be carried across the network, says an airline spokesman. "This represents a 23 per cent increase on last year and is the highest number of passengers carried in a single month in the airline's history."

The Christmas holiday period between December 15 and January 10 is forecast to outperform last year too, the airline says. The passenger ratio has risen from 78 to 81 per cent during the period.

For some passengers, the flip side of a surge in traffic demand may be an increase in ticket fares compared with last Christmas. Price rises are most likely for those travelling to the most popular destinations in Europe and Asia, says Mr D'souza.

London, Paris, Madrid, Beirut, Istanbul, Bangkok, Hong Kong, Kuala Lumpur, New York and Los Angeles, as well as Germany, are among the most popular destinations for outbound passengers on Emirates routes, a spokesman for the airline says.

"We have a healthy load during the Christmas period, with some destinations sold out," says Boutros Boutros, the divisional senior vice president of corporate communications at Emirates.

Carriers are also gearing up for a healthy inflow of demand as holidaymakers seek winter sun. Some carriers are adding seats to and from the most popular destinations.

Emirates is raising capacity between Perth and Dubai during the Christmas period to cope with extra demand to and from Western Australia.

Capacity on the carrier's two daily flights is being raised from last Sunday to New Year's Eve, with many of the flights being serviced by a larger 777-300ER aircraft, providing 100 additional seats for each flight.

From next Sunday to January 7, the airline is also operating two extra flights to and from Perth.

Flydubai is increasing services to Amman, Baku in Azerbaijan, Beirut, Belgrade, Donetsk in Ukraine, Istanbul, Kiev, Kuwait, Tbilisi in Georgia and Yerevan in Armenia.

Non-regional airlines are also preparing to take advantage of the increased demand in the region.

British Airways expects to post 10 per cent growth in passenger traffic this month compared with December last year.

Lufthansa also says it is recording "positive trends" on its Middle East routes in part due to a boost in capacity on its Abu Dhabi-to-Frankfurt service and an upgrading of its Doha-to-Frankfurt schedule to daily.

Airlines will be relieved if they avoid a repeat of last Christmas's travel chaos. Then bad weather in the week before the main festive season led to the closure of London's Heathrow and delays at major airports including Frankfurt, Paris and Amsterdam.

Air France-KLM, one of the worst hit by the problems, says it lost an estimated €70 million (Dh338.7m) because of a drop in traffic. British Airways estimated the chaos cost it at least £50m (Dh286m).

For Middle East airlines, the disruption also carried a cost. Etihad paid to put up delayed customers in the UAE at hotels while it cleared a backlog of flights.

Barring a bout of severe weather in the coming days, this Christmas should allow airlines to bury the memory of last year's financial woes. But the festive season could prove to be a last hurrah before renewed headwinds hit the industry.

The International Air Transport Association (Iata) last week cut its collective net earnings forecast for next year from US$4.9 billion (Dh18bn) to $3.5bn.

Iata blamed the reduction in its best-case scenario on the euro-zone sovereign debt crisis. If the zone's debt problems escalate into a full-blown banking crisis, Middle Eastern airlines could fall into losses of $400m next year, it warned.

"The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the euro-zone sovereign-debt crisis," said Tony Tyler, Iata's director general and chief executive, last week.

Under that scenario, airlines may be feeling a hangover from the festive season well into next year.

tarnold@thenational.ae