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23
Oct-2014

Asian airspace congestion could impact airlines’ growth

News   /  

By Shane McGinley

Severe airspace congestion at key Asian airport hubs is quickly becoming a major obstacle to fast-growing Gulf airlines’ plans to expand into the region, experts have warned.

The three major GCC carriers – Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Doha-based Qatar Airways – have targeted South-East Asia for growth and between November 2011 and November 2013 capacity between the two regions increased by 54 percent, with 228,716 seats per week across the three airlines.

However, executives at air traffic management firm NATS warned that airspace congestion in both the Middle East and Asia is becoming a major obstacle to sustaining such impressive growth.

“It is no fluke that the two areas we are focusing on in terms of international work are the Middle East and Asia/Japan,” said John Swift, director of NATS Middle East.

“Hong Kong, Singapore, Indonesia are really up there, Jakarta has a big bottleneck… It is having an impact on countries’ GDP and an impact on international trade,” added Catherine Mason, managing director of NATS Services.

“There is a long pipeline of orders for both Boeing and Airbus for deliveries mostly into those regions and if all of those orders are realised there just isn’t enough capacity in the way the airspace is designed to be able to accommodate all the movements required. So there are orders for aircraft but they frankly can’t fly where people want them to fly so stuff will have to happen.”

Saj Ahmad, the chief analyst at UK-based Strategic Aero Research, said Asia still has some capacity available but the growing bottlenecks at major airport hubs could lead to the sort of protectionist policies Gulf airlines have faced in Canada and Europe.

“As we know, airlines around the world fear GCC airline expansion and now Asia, like the USA and Europe is worried so I’m not surprised that GCC airlines are finding it difficult to grow.

“So whether airlines can individually negotiate extra traffic rights at a city or federal level, they may have to ask at a governmental level to go down the open skies or bilateral route to harness more slots, much in the same way the UAE did with India recently,” he said.

Closer to home, airspace congestion around the Gulf’s main aviation hubs is also likely to have an impact on growth and trade. Dubai Airports boss Paul Griffiths told Arabian Business last year it was the single biggest issue facing the industry and admitted it could soon stifle the region’s burgeoning aviation growth.

NATS said daily traffic volumes in the UAE are set to double by 2030, increasing from 2200 at present to around 4600 per day.

With aviation likely to account for nearly a third of GDP by 2020, NATS recently launched a dedicated office in Dubai to try and address the growing challenge of airspace congestion in the region.

Swift said the GCC currently represented a small percentage of its revenue, in the low single digits, but he estimates this will at least triple over the next few years and it is aiming to expand its business across the wider Gulf region.

“A permanent, on the ground presence covering the MENA region is a major milestone for us. Over recent years NATS has successfully completed projects in Kuwait, Qatar, Oman and the UAE, but having a dedicated regional office is a clear sign of our long term commitment to working in partnership with the aviation community, especially as it seeks to harness aviation as an economic engine for growth.

“Addressing airspace congestion within the Gulf remains a critical challenge, and our approach is to leverage our expertise and experience – including in some of the world’s busiest airspace – to find solutions so that the GCC ensures it remains a global aviation powerhouse. Working in partnership as an industry is the key to the development and implementation of successful solutions, and NATS Middle East stands ready and willing to be an active part of that effort,” he said.

 Source: http://www.arabiansupplychain.com/article-10556-asian-airspace-congestion-could-impact-airlines-growth/

 

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