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Feature - Aviation
Charting a new course
The region’s airlines have been navigating through some rough air over the last few years but bold strategies are at the heart of recovery plans for success Flydubai Boeing 737 Max 8
Airlines in the Middle East have faced a challenging period, feeling the effects of geopolitical shocks, increasing competition and rising oil prices before the pandemic grounded flights globally and brought the sector to a virtual standstill. While some shut shop, others embarked on a new course with bold strategies in tow. The International Air Transport Association (IATA) expects overall traveller numbers to reach four billion in 2024, exceeding pre-COVID-19 levels (103 percent of the 2019 total), which signals that the industry is moving in the right direction. But along the way, lessons are being learnt. John Strickland, a leading commentator on the airline sector for media worldwide, said: “If not already understood, the importance of having sufficient liquidity has been made crystal clear. The strongest players have ensured that this is the case and indeed have gone out to strengthen reserves.”
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While it remains clear that the industry is on its way to recovery, with the world still not out of the grips of the COVID-19 crisis, the impact is still being felt. “Recovery is going to be lengthy. It could run into years and the structure of many markets will change. Some important sources of traffic, such as business travellers using premium seats, may not fully recover,” he said. Discussing the prevalent challenges, Strickland explained: “Some airlines are hedged on fuel and have managed to buy forward at prices lower than those prevailing in the market, others are not so fortunate and are currently exposed to rising costs which will be difficult to pass on in prices due to the fragile nature of recovery. Paying back the debt that many airlines have had to take on just to survive will be one of the greatest challenges in the years ahead.” Shedding light on the key strategies that worked for airlines which managed
09/05/2022 5:48 PM
