Airlines call for regional ‘open skies’ agreement

06 June 2008

Deregulated market would allow access to any airport in the region and potentially boost passenger traffic.

Senior aviation industry figures are pushing for an open-skies deal across the Middle East within five years, allowing airlines unrestricted access to any airport in the region and potentially giving a massive boost to passenger traffic.

The deregulated market should help open up new routes and drive down fares. However, some airlines that have already been weakened by high fuel prices could struggle to cope with the extra competition.

Middle East aviation officials say they are confident that Arab Control, the concept for a fully integrated pan-regional airspace and air traffic control system, could be in place early in the next decade.

Abdul Teffaha, secretary general of the Arab Air Carriers Association (AACO), which represents 24 airlines around the region, says he is optimistic that the timeframe is realistic.

AACO is working with the Arab Civil Aviation Commission and national aviation regulators to implement Arab Control. It is also working with the EU and the European Organisation for the Safety of Air Navigation (Eurocontrol) to synchronise its efforts with the Single European Sky ATM Research (Sesar) project.

“It is a very complex issue,” said Teffaha, speaking on the sidelines of the annual general meeting of the International Air Transport Association (IATA) in Istanbul on 2 June. “The Europeans have been dealing with this for 15 years, but I think we can do it faster, learning from their experience.

“I think, depending on the political will from Arab governments, this can be achieved within five years. It will create an easier and more flexible route structure within the Arab world, and between the Arab world and Europe.”

There is enthusiasm among many Middle East carriers for greater deregulation. Tim Clark, president of Emirates Airline, has previously expressed hope that the region’s major carriers could use their influence to unite the Gulf’s fragmented airspace to create a single flight information region (MEED 23:11:08).

However, a fully fledged open skies deal is a far greater challenge and there will need to be strong political commitment from governments in the region if the five-year timeframe is to be met.

While some jurisdictions such as Dubai already have open-skies arrangements in place, aviation across the Middle East remains fragmented.

Several national carriers are sheltered from the full competition that an open sky system would bring and will be loath to relinquish the state protection.

In particular, Saudi Arabia is frequently cited by airlines as a stumbling block to a fully harmonised airspace. Several carriers complain that the kingdom’s declared enthusiasm for a single-sky system is at odds with the restrictions placed on new entrants to the Saudi market.

“Saudi Arabia has a dedicated department to look at the single sky, but progress has been very slow and it is still difficult to get the access to the Saudi market we would like,” says a senior official at one major Gulf airline.

However, Andrew Cowen, chief executive officer of Saudi low-cost airline Sama, says the kingdom has been unfairly maligned.

“There has been a lot of misinformation about Saudi Arabia’s position,” he says. “How many countries in the region have three airlines operating?

“Saudi Arabia has liberalised its aviation market far more than other countries yet it is always held up as the bad boy in this regard. It has resisted liberalisation in the past, but the civil aviation authority deserves credit for the steps it has taken in recent years.”

Cowen is optimistic that a single sky policy can be pushed through rapidly if aviation across the region is not hampered too much by the rising cost of fuel, which is having a severe impact on the aviation industry.

“Establishing a common market only makes sense to the public if there are tangible benefits, and with the single sky across the EU this has been the case,” says Cowen. “The genie is almost out of the bottle. When the public see the new entrants to the market provide a better service at lower fares it will accelerate the process of deregulation. I think a Middle Eastern single sky will come quickly if it is not waylaid by fuel costs.”

Teffaha says the severity of the fuel crisis could hinder a deal, while the issue of security could also create difficulties.

Several airlines around the world having already been forced to suspend operations in recent months including Silverjet, which provided business class-only flights between Dubai and London.

While several bankruptcies are predicted to follow in the sector if fuel prices stay at current levels, air traffic in the Middle East is expec-ted to continue to grow.

“The rise in oil prices is generating disposable income which encourages people to travel and governments are not going to stop it” says Teffaha. “The will is there to position Arab airspace for new dimensions of success. We expect the Middle East to have the hubs of the 21st century as Europe had the hubs of the 20th century. I hope within five years we can say we have a harmonised Arab and European airspace.”

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