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Emirates-Etihad merger rumours - Is there room for consolidation in the Middle East?

28-Nov-2008

International premium demand plummeted in the Middle East in Sep-08, while IATA predicts combined Middle East airline profits of just USD200 million this year. Taking out Emirates’ strong contribution most of the region’s 30+ carriers are likely to incur deep losses this year. So is consolidation the next step for the Middle East as a response to the sharp slowdown in global and regional economies? There have also been reports growing financial pressures in the UAE could even prompt a merger between powerhouse airlines Emirates and Etihad, to create an Air France-KLM style force in global aviation. [1501 words]

Unlock the following content in this report:

Subheadings:

  • The Middle East juggernaut stumbles
  • Premium revenues tipped to decline
  • Economy traffic also weaker
  • Middle East airports feeling the slowdown
  • Dubai debt levels raise concerns
  • Consolidation may be logical, but unlikely
  • Outlook: Anything is possible, but carrier independence likely to be maintained

Graphs and data:

  • International premium demand by region (% change year-on-year): Sep-08
  • Premium traffic growth by region: Jan-08 to Sep-08
  • Premium traffic growth in markets linked to the Middle East (% change year-on-year): Jan-08 to Sep-08
  • Middle East vs Industry international passenger traffic (RPKs) growth (% change year-on-year): Nov-07 to Oct-08
  • Middle East vs Industry international passenger capacity (ASKs) growth (% change year-on-year): Nov-07 to Oct-08
  • Middle East vs Industry international passenger load factor: Nov-07 to Oct-08
  • Airports Council International passenger traffic by region (% change year-on-year): Rolling 12 months to Sep-08, Nine months to Sep-08 and Sep-08
  • Airports Council International Middle East airports' passenger numbers growth (% change year-on-year): Oct-07 to Sep-08
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