Tourist Spot

UAE Airlines Continue To Add More Seats Despite Omicron: Dubai-Riyadh Now Busiest International Route In The World

Continuing to increase capacity on key routes is the strategy adopted by UAE airlines. Moreover, these days more and more passengers arrive with Dubai as their final destination and do not transit.
Image Credit: Ahmed Ramzan / Gulf News

Dubai: UAE airlines continue to add more seats to key destinations even as the travel industry grapples with Omicron fear.

Data from consulting firm OAG shows that in the weeks following the discovery of the latest variant of the coronavirus, airlines departing from the United Arab Emirates added seats. Dubai-Riyadh was the world’s busiest international air route this month with around 284,000 seats, followed by Cairo-Jeddah (282,413 seats) and Dubai-London Heathrow (253,567 seats).

“In terms of seat capacity, we don’t really see any type of major reduction, except for routes to a few African countries that have been affected, such as South Africa and Zimbabwe,” said André Martins, partner at Oliver Wyman. Martins believes that the current rise in traffic is mainly due to the transformation of Dubai into a final destination.

While previously Dubai was a transit destination for passengers traveling from Europe to Asia (and vice versa), the city has become a leading global tourism site, with point-to-point traffic starting to account for a more important. “There are a lot of other types of factors that contribute to this, like the Expo and a few other big events,” Martins said. “I hope that in the medium and long term things will get back to normal.”

Still, “transfer flows are very relevant to airlines in the region as they represent a large majority of traffic,” Martins said. “This market has been more affected because passengers fear to travel longer distances.”

Softer impact

Martins said the latest wave of restrictions resulting from the “Omicron” variant would not have a huge impact on global demand for air travel. “As far as I know, there is no discussion going on to fully enter a lockdown – I think governments are much more careful when it comes to implementing these kinds of policies,” said Martins.

“The pandemic has been here for quite some time and people are aware of all of these uncertainties. I would expect less last minute rushed reactions.

Prices remain high

Airfares to the UAE from some of its largest markets have increased in recent months – and limited capacity is to blame. “Prices are mainly determined by two things; first of all, we are not yet at the level where we were before in terms of the capacity to deploy, ”he added. “Second, there is obviously a very large increase in demand to the United Arab Emirates due to different kinds of factors.”

Martins added that recent government reforms and policies have encouraged people to stay in the UAE longer. “We observe that many people who settle in the region are not doing so on a temporary basis.”

Qatari World Cup

Next year’s FIFA World Cup will bring millions of football fans to the region, and UAE airlines will greatly benefit. “We are expecting a big increase in traffic to Doha due to the major event and this will also generate a lot of traffic for the UAE through stopovers,” Martins said. “Residents of the United Arab Emirates will also be flying in and out of the country to attend the tournament.”

Airports vs airlines

With the recovery in passenger numbers, airports began to increase their landing fees and this was not welcomed by airlines. Willie Walsh, the managing director of the International Air Transport Association (IATA), has been pretty candid on the matter.

Referring to airports, Walsh said, “They continue to shock everyone with their demand for a 90% increase in airport charges at a time when the industry is trying to get back on its feet.”

Martins believes that although the concerns of airlines are valid, airports need significant working capital to keep their operations going. “Airlines have become much more cautious about operating costs, but at the same time airports have high fixed costs and are very complex to manage.”

Airports typically have a 15-30 year investment cycle and “depending on when you are in the investment cycle you may need to have higher or lower airport charges to offset some of those investments” , said Martins.