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The MENA region airlines bucked the global trend in 2009. It was the only region that had an increase in traffic and had the loss forecast dropped by 50% to half a billion. The region saw an increase in flights and in destinations.

2010 promises to be an exciting year for the region. Airlines in all segments are competing for a leading position.

Emirates facing the crunch?

Emirates remain the leader of the pack, with a brand that, by far has no rival not only in the region but globally. So far Emirates has shown a financial ability to finance its expansion without burdening Dubai. The problem Emirates might face is a tightening of credit due to Dubai World’s and by extension Dubai’s problems. And as previously mentioned on SimpliFlying, even a merger between Emirates and Etihad cannot be absolutely ruled out.

Etihad and Qatar Airways expanding?

Etihad and Qatar Airways are both embarking on an expansion spree, supported by oil revenues of their respective governments, a viable means as long as oil prices hold at their current levels. Needless to say both carriers have not turned any profit yet. On a service level and as a brand both are offering services that in some cases not only rival Emirates, but exceeds it.

Royal Jordanian merging?

Royal Jordanian, the first Arab Carrier to join an alliance (One World) and the second Arab Carrier to privatize and be listed in the Amman Stock Exchange, is floating the idea of a merger with another regional airline or European airline by mid 2010 as the means of sustaining growth. This may be easier said than done since the Government’s approval is crucial (holds 39.5% of the stock) and the other problem is finding an airline that is compatible with the RJA brand displayed in their new A319, A320 and A321 fleets in terms of cabin and IFE.

Gulf Air going regional?

Gulf Air is looking to restructure and reinvent itself as a regional carrier as opposed to an Emirates or Etihad clone. For that they have employed Royal Jordanian’s ex CEO, the same person that lead RJA to profitability, privatization and into an alliance. GFA has already made its first review and as a result returned the Leased B777 back to Jet Airways and confirmed a 20 A320 orders from Airbus with a delivery rate of one aircraft a month. A sticking point is the union that opposes any Bahrain nationals staff cuts. The union has thwarted several restructuring plans in the last 10 years.

Oman Air re-inventing itself?

Oman Air has lead the region with an new First, Business and Economy seating plus connectivity on their A330 fleet with a Thales IFE and Higher bandwidth SwiftBroadband platform to deliver GSM/GPRS and WLAN via OnAir., launching a new campaign of “The Change is Here” .

The LCC onslaught?

On the LCC front as Air Arabia launches its second international hub (Alexandria-Egypt) in 2010, it faces stiff competition from FlyDubai and a reemerging RAK Airways. In Kuwait Jazeera Airways departed form the LCC model and is offering Business Class similar to Bahrain Air.  This sector is facing competition not only from within but from other Legacy regional airlines.

These are a few of the issues facing the region’s airlines and promises an even more exciting year.

• Etihad Airways charging a second bag fee? Bad idea for a brand trying to establish itself
• Gulf Air and Kuwait Airways up for sale – do the brands stand a chance?
• Will the Dubai crises lead to a mega Emirates + Etihad airline brand?
• How airlines in the Middle East are enhancing brand value through their frequent flyer programs
• The future of Middle East Super-Airlines: Emirates and Etihad to merge, and Qatar to join an alliance

LCCs have started serving multiple P2P sections, effectively like a hub and spoke model. Tiger Airways customers can book two flights in one booking using their Flight Combo feature, effectively being able to travel from Chennai to Perth via Singapore, or from Darwin to Hanoi via Singapore. Air Berlin in Europe allows similar flexibility to passengers, flying via Düsseldorf in Germany.

Tiger Airways route map

The latest kid on the block is Air Arabia, the extremely popular Sharjah, UAE based airline. As mentioned on Popagandhi, they have formed a joint-venture with Nepal’s Yeti Airlines to launch a new budget carrier flyyeti.com, offering destinations in Southeast Asia and even Hong Kong based out of Kathmandu. So you can fly from Yerevan, Armenia to Hong Kong via Sharjah and Kathmandu (I’ve been to Armenia, and trust me, it’s not easy to get to that place, and you don’t want to fly Aeroflot). So why does this make sense for LCCs?

According to the ITA travel blog, “This is a great idea as it saves you having to work out if both flights you need are available and you save an extra booking fee.” Not only that, you can travel from places that were previously very poorly connected – like flights from Jaipur, India to Bangkok, Thailand (the layover in Nepal can’t be that bad). For the airline, this often means greater passenger loads for under-performing routes. Also, they can capture the attention of the passenger for much longer, and impress them so much that they come back for more. Can’t ask for more!

Though this sounds rosy, there are two concerns most passengers are likely have:
1) How long can I stay without food, water and entertainment?
2) Am I willing to pick up your baggage from the belt and re-check it in to the next flight?

Nevertheless, this is a step in the right direction. It shows that the brains in these airlines are well greased. It’s these innovative ideas that will keep them ahead in the industry.

Ponder that!

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This is the first article in the Low Cost Carrier series. The next one comes out on Monday, 19 June and it will be about how LCCs are beating the competition in their own unique ways. Keep a lookout for it!

• Five reasons why budget airlines in Asia are successful
• Low cost airline brands get creative with ancillary revenues – lounges, shops and cargo!
• Cartoon of the day and more airline humor
• Why Air Asia’s “budget alliance” with Qantas and Jetstar is a stroke of genius – Live on CNBC Asia with Martin Soong
• Singapore Airlines – Time for re-branding?