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MENA airlines praise Beirut's open skies policy.

Summary: MENA countries should follow the lead of Lebanon's open skies policy to help the aviation sector grow to its full economic potential.

SHARJAH, United Arab Emirates: MENA countries should follow the lead of Lebanon's open skies policy to help the aviation sector grow to its full economic potential, said experts speaking at a conference held in the UAE emirate of Sharjah Monday.

"The open sky policy at [Rafik Hariri International] Airport would continue to boost growth in Lebanon's aviation sector and is indeed an example to be followed by many Arab countries that still follow a very closed approach to aviation," chief executive of Air Arabia Adel Ali told The Daily Star.

An open skies policy entails the liberalization of regulations on commercial aviation and granting international carriers free access to run flights to a nation's airports.

According to Ali, Lebanon's flag carrier Middle East Airlines has not been affected negatively by the policy, but has in fact managed to grow in spite of the tighter competition brought by the policy.

He said investments, job opportunities and higher tourist activity brought by an increasing number of airlines that opt to fly to Beirut would by far outweigh any drop in MEA profits.

Nevertheless, Ali stressed that for Lebanon's aviation sector to boom, political stability and additional investments in infrastructure are needed.

The conference dubbed "Arab Aviation and Media Summit 2012," organized by Air Arabia, focused on key challenges currently faced by the Arab airlines sector.

A key challenge addressed by speakers was that countries across the region still opt for illiberal aviation policies that hinder growth in the sector.

Some of the region's governments argue that these policies aim to protect national carriers from unfair competition by international and regional carriers. "These airlines are viewed by many governments as essential national emblems like the anthem or the flag," highlighted Abdul-Wahab Tefaha, secretary-general of the Arab Air Carriers Organization.

He said these policies are costing the region billions of dollars in lost investments in aviation-reliant sectors, including tourism, hospitality, airport servicing and other key sectors.

In a panel discussion on the impact of the Arab Spring on the sector Majdi Sabri, regional vice president of the International Air Transport Association, said that the revolutions have left their marks on the sector.

"We saw a 50 percent drop in the number of passengers in countries including Tunisia, Egypt, Libya, Syria and Yemen," he said, highlighting that total losses in aviation and tourism stood at a massive $10 billion.

But Sabri said the sector was rapidly recovering as the first quarter of 2012 saw an impressive 15 percent growth in the number of passengers.

Tefeha echoed Sabri, saying recovery signs have been evident.

"This has been largely possible because of successful management [of some Arab Airlines] that endorsed business opportunities in long-haul trips," he said suggesting the sector would quickly recover from slower growth and losses seen in 2011.

In his opening remarks Ali highlighted "an enormous potential for growth" for Arab carriers on both regional and international markets.

"Today Arab airlines carry no more than 3 percent of passengers globally and the industry contributes only 6 percent of the region's aggregate GDP," he said, highlighting that only one in three Arabs is a regular traveler.

These figures suggest the region's airlines are capable of achieving sustained double-digit growth over the next decade.

Omar bin Ghaleb, deputy director general of the Civil Aviation Authority of UAE said countries in the region should improve regulatory frameworks governing the sector.

"Major airline routes have already passed 50 percent of capacity," he said, adding that the congestion suggests the region's governments should agree higher capacity and more efficient, shorter routes.

Peter Heath, chancellor of the American University of Sharjah, said universities should play a more vital role in providing the human resources required by the sector to grow.

Chris Taylor, vice president at Spectrum Capital, said the Arab airlines have been much more dynamic than their international counterparts.

"Middle East Airlines have shown they are capable of rethinking their business models when such a need arises," he said, expressing pessimism about the prospects for European and American airlines.

Taylor, as well as most speakers at the conference, argued that oil prices should be lowered to $80 to $100 per barrel to sustain the aviation industry globally.

Copyright 2012, The Daily Star. All rights reserved.

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Publication:The Daily Star (Beirut, Lebanon)
Geographic Code:7LEBA
Date:May 1, 2012
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