x Abu Dhabi, UAESunday 23 July 2017

Emirates and Etihad take toll on rivals

Established players in Europe and Asia have suffered some of their worst declines in ticket sales in five years.

ABU DHABI // The rise of Etihad and Emirates airlines is taking its toll on established players in Europe and Asia, which have suffered some of their worst declines in ticket sales in five years according to data released yesterday. First class travel between Europe and Asia shrank by 2.5 per cent in March compared to the same period last year, according to the International Air Transport Association (IATA), a trade body representing more than 200 airlines.

This long-haul route is vital for the global airline industry, representing 16 per cent of global revenues. Worldwide, first and business class tickets purchased in March fell by one to two per cent as the effects of the slowing US economy and the global credit crisis dampened the ability of companies and individuals to afford the higher ticket prices. This was the first real decline in premium ticket sales since 2003, the IATA said.

The declines come as Middle Eastern airlines are recording their best performances to date. First class ticket sales for flights between the Middle East and East Asia surged by 17.3 per cent in March. This follows the opening of new routes to Guangzhou and Beijing by Doha-based Qatar Airways and Abu Dhabi's Etihad Airways, with Dubai's Emirates airline also aggressively expanding its Asian footprint.

The results have led the IATA to suggest they were part of the declining fortunes for Asian and European carriers. "The relatively weak Europe to Far East premium travel growth is a little surprising, given the buoyant trade between these two regions," it said, adding that growing sales for travel between Europe and Asia via Middle Eastern hubs "may have taken growth away from Europe to Far East".

The global figures comes at a time when airlines are being forced to levy successive and increasing fuel surcharges on passengers amid record oil prices that have already helped cause airline bankruptcies, from Hong Kong to the US. "Given the importance of premium passengers for airline profitability, the absolute decline in real numbers is bad news, particularly since the price of jet fuel rose 170 per cent over the year," the IATA said.

One of the bright spots in the monthly figures was the African travel market. Although extremely small compared with other regions, it experienced one of the strongest increases in first class travel, both within the continent and to the Middle East.