Airbus banks on narrow-bodies to lead recovery in Middle East

Published: 12 August 2020 - 5 a.m.
By: Aviation Business

Airbus believes that Middle East operators will begin ordering narrow-body planes well before new wide-bodies are purchased as the aviation industry begins to drag itself out of the coronavirus crisis.

The pandemic virtually put a stop to aircraft orders and deliveries in Q2 as international travel restrictions caused passenger demand to evaporate and airline revenues and cash reserves to nosedive.

Mikail Houari, Airbus’ Middle East and Africa president, has said that the planemaker expects air traffic to reach pre-pandemic levels between 2023 and 2025.

“Therefore, the single-aisle market is expected to lead the recovery, while wide-body should take longer,” he told Gulf News.

Airbus in July bagged its first new orders in three months, which were all unsurprisingly for single-aisle aircraft capable of carrying around 200 people. Similarly, all of the company’s 49 aircraft deliveries were narrow-bodies, highlighting the fact that operators are still reluctant to take delivery of long-haul aircraft.

Among the deliveries were two A220-300 for Egypt Air and a number of A320neos for Lebanese flag carrier Middle East Airlines.

The Middle East region has historically been known for its over-capacity but airlines have been forced to rapidly reduce their fleet sizes in the wake of the demand-stripping pandemic. The local market is unlikely to see large orders for wide-bodies while short-haul routes remain the most popular and profitable.

Houari said that while the Middle East airline industry will change and evolve over the next few years, he is confident that it will fully recover.

“Whether it is new routes, new partnerships or different service models, airlines will find ways to adapt,” he told the newspaper. “Some may not survive… and new airlines may emerge.”

While a recent report by the International Air Transport Association (IATA) claimed that the region was recovering at a slower rate than the global average, Houari said that the geographic location of the Middle East market will make it one of the fastest to recover.

He said: “A factor that will contribute to swift recovery is government interest. Aviation and tourism have been high on the agenda of regional governments, which have invested heavily in advanced airlines and infrastructure.”

The impact of flight suspensions in the Gulf region was laid bare recently when UAE carriers Etihad Airways and Air Arabia published their half-year results.

Etihad’s half-year losses increased by nearly 30% to $758 million while Air Arabia made a loss of $46 million in the first half of 2020.

Both airlines operate Airbus narrow-bodies and the pair recently launched their joint venture, Air Arabia Abu Dhabi, which is built on the short-haul sector.

European airline Wizz Air will launch its own subsidiary in Abu Dhabi later this year and attempt to further stimulate the region’s short and medium-haul market with extremely low fares and aggressive marketing campaigns.

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