Middle Eastern carriers to take part in acquisition activity: IATA

IATA Chief Economist Brian Pearce stated Middle Eastern carriers, while reporting the strongest traffic growth, have to manage some of the challenges in 2011 such as profitable growth, overcapacity and consolidation (Khaleej Times, 07-Jan-2011). Mr Pearce added that he believes Middle Eastern carriers will take part in acquisition activity where ownership rules allow.

IATA: "In mature markets like North America and Europe, consolidation is the natural course of things for the industry. But in fast growing parts of the world such as the Middle East and Asia, there is still room for new entrants and for growth of existing carriers. There are still many markets where you would probably see new airlines coming along to serve. Perhaps one area where there may be consolidation, if regulation allows, is on the big long-haul international markets, where it would make sense to see global brands emerging. And that, I think, would be a case, where if we see some change in ownership moves, we might see some consolidation. What we are certainly seeing is much closer alliance relationships, which is the second best solution. We saw some progress last year with governments signing up to the agenda for freedom, but there seems to be a very slow moving process. Governments don't seem very quick to change the agenda," Brian Perace, Chief Economist. Source: Khaleej Times, 07-Jan-2011.