A golden age of Middle Eastern aviation is drawing to a close. The growth in demand that has underpinned the incredible expansion of the region's airlines including Emirates, Etihad Airways, Qatar Airways and Turkish Airlines is slowing.
This is natural, after what has been a phenomenal 20-year cycle. It is also a result of the drop in oil prices from the summer 2014 peak of $114 a barrel. Low oil prices help airlines reduce costs, but they also impact economic activity in the region, reducing demand for air travel. We have recently witnessed a situation in which growth in demand for air travel has not recovered, but oil prices have to a greater degree, eroding profit margins for carriers.
This is a period of challenges and changes. Broader industry trends, chief among them technological and engineering advances, are playing an important part. Growing fuel-efficiency is enabling aircraft to fly greater distances at a lower cost. As a result, there will be fewer refuelling stops, less need for transfers and more direct flights.
Since the late 1990s, the Middle East has connected Asia with Europe and beyond. As a result, airports in Dubai, Abu Dhabi, Istanbul and Doha have become regional hubs for intercontinental transfers.
Last year, Dubai International served close to 90 million international passengers – more than any other airport in the world. However, the most striking aspect of its success is the spirit in which it was achieved. In addition to world-class infrastructure, Dubai set a new benchmark for customer service. In an industry dominated by strict, post-9/11 security precautions, making travel as pleasurable as possible was its masterstroke.
Making travel as pleasurable as possible was its masterstroke
The advances made by Middle East carriers became impossible to ignore in 2015/2016, when the big three US airlines launched efforts to block their expansion in what became known as the Open Skies row. Despite a concerted and at times ugly campaign against Emirates, Etihad and Qatar Airways, this dispute over flying rights served only to highlight how poorly treated passengers on US carriers were by comparison.
However, the supremacy of Middle East carriers and that of the hub model will not last forever. The playing field is being levelled by technology, with smaller airlines now able to afford to operate new-generation aircraft and offer similar on-board experiences.
But there is no need to panic. Asia’s aviation sector followed a similar arc, starting in the 1970s and ending with the region’s financial crisis of the late 1990s and the outbreak of the Sars epidemic in the early 2000s.
Today, Asian airports, including those in China and India, are the fastest-growing in the world, while carriers such as Air Asia are at the forefront of how technology is being used to create more dynamic and flexible air transport for both people and goods.
Meanwhile, in the fiercely competitive and lucrative transatlantic market, companies such as Norwegian Air have shown that it is possible to disrupt more established carriers. However, despite its success in grabbing market share, Norwegian Air has struggled with the pace of its own expansion. Fortunately, there is still time to adjust and set the right path for the future.
Back in the UAE, Emirates has always said that it is more than just an airline, aiming to be a global connector through its Dubai hub. Tim Clark, its president, told The National this week that as it evolves its fleet of aircraft, its network will "take on a different form". Emirates is certainly not sitting still while the world changes around it.
Abu Dhabi's Etihad is also going through a transition that it hopes will position it for sustainable success, rather than trying to maintain the rapid expansion of the past. Inevitably, this all means a more homogenous aviation landscape, making it much harder for the region's airlines to stand out as clearly as they have in the past.
Perhaps flying won't feel as special as it has for the past 20 years, thanks to the efforts of the UAE's airlines. However, recent efforts by Emirates and Etihad to highlight how the industry can offset its carbon footprint indicate that the next era for global aviation might be a more environmentally conscious one. That could be a truly golden age for us all.
Mustafa Alrawi is an assistant editor-in-chief at The National
West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
Dubai Rugby Sevens - Winners: Dubai Exiles; Runners up: Jebel Ali Dragons
West Asia Premiership - Winners: Jebel Ali Dragons; Runners up: Abu Dhabi Harlequins
UAE Premiership Cup - Winners: Abu Dhabi Harlequins; Runners up: Dubai Exiles
UAE Premiership - Winners: Dubai Exiles; Runners up: Abu Dhabi Harlequins
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Results
5pm: UAE Martyrs Cup (TB) Conditions Dh90,000 2,200m
Winner: Mudaarab, Jim Crowley (jockey), Erwan Charpy (trainer).
5.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,400m
Winner: Jawal Al Reef, Richard Mullen, Hassan Al Hammadi.
6pm: UAE Matyrs Trophy (PA) Maiden Dh80,000 1,600m
Winner: Salima Al Reef, Jesus Rosales, Abdallah Al Hammadi.
6.30pm: Sheikha Fatima bint Mubarak (IFAHR) Apprentice Championship (PA) Prestige Dh100,000 1,600m
Winner: Bainoona, Ricardo Iacopini, Eric Lemartinel.
7pm: Sheikha Fatima bint Mubarak (IFAHR) Ladies World Championship (PA) Prestige Dh125,000 1,600m
Winner: Assyad, Victoria Larsen, Eric Lemartinel.
8pm: Sheikh Zayed bin Sultan Al Nahyan Jewel Crown (PA) Group 1 Dh5,000,000 1,600m
Winner: Mashhur Al Khalediah, Jean-Bernard Eyquem, Phillip Collington.
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
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