Etihad Airways experiences record flight bookings
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Brexit follow-up Part 3: Gulf airlines, Turkish lose UK ally in M/E talks as protectionism spreads
The Brexit referendum produced a vote for the United Kingdom to leave the EU, although this process has not yet been formally invoked. In the scope of aviation, one outcome is the potential loss of the UK in shaping air service agreement negotiations. The UK has been a liberalising voice, one that often counterbalanced more protectionist views from France and Germany. The UK is often able to galvanise the smaller EU states too.
The EU now has mandates to negotiate open skies with states, including the UAE, Qatar, Turkey and the ASEAN bloc. The UAE and Qatar, home to the three Gulf network airlines, are expected to produce the most contentious negotiations. France and Germany will surely takes cues from Air France and Lufthansa to impede Gulf growth. In this light there are questions about whether the talks are genuinely motivated, or merely designed to draw out the discussion and thereby not produce any additional traffic rights while under negotiation.
What Air France and Lufthansa need is a real, lasting solution, rather than persevering Canute-like with stonewalling. Although a partnership seems logical, they may have waited too long. The Gulf airlines have found that they can succeed on their own.
Philippine Airlines may cut Middle East capacity and network, and end Etihad partnership
Philippine Airlines (PAL) is considering reducing capacity to the Middle East in 2017 while expanding in several other international markets, including Australia, China and the US. Yields in all seven of the group’s Middle East markets – all of which have been launched over the last three years – have been impacted by intensifying competition and weaker outbound demand.
PAL could suspend services to Abu Dhabi and terminate its partnership with Etihad. The airline group has not benefitted significantly from its Etihad codeshare, and may be better off partnering with another airline.
However, PAL is keen to continue growing its international operation. PAL is about to add capacity to the US using two additional 777-300ERs, and plans to add capacity to Australia in late 2017 following delivery of its first batch of A321neoLRs. New destinations in Europe and the US are under consideration for 2018, using its new A350-900 fleet.