Is the airline next door about to go under?
 

Disclaimer: This is a discussion based on an article from The Economist, so no reason for them to get angry I guess, plus they probably won't have money to sue anyone now :D

https://www.economist.com/news/busin...-airlines-face

This article says that they can actually close doors. I also heard that they can become a low-cost carrier (maybe a merger with FlyDubai?)

I mean Air berlin, Alitalia, Virgin Australia.. Plus low oil prices, so no business to fill the premium cabin for years to come unless some miracle happens to lift the oil prices up.

So now what? If they go belly up, it would be a huge blow to the whole reputation of the region. Somehow I don't see it happening. What is your opinion on their future?

Which next door. Next door to AD or DXB. In both cases no.

the article is 3 months old.... an eternity in the aviation world.
loads are back to normal from what I hear, except in premium class on some sectors.
The unmentionable is indeed in deep trouble it seems but, as opposed to Dubai, their owners have very deep pockets and other revenue streams...
Clubbing both uae airliners would indeed create huuge synergies and completely reshape the competitive landscape...
Lets see how 'united' the UAE is the coming years.....

That is what I would call a non sequitur.

Icarus, what is wrong with what I said? Isn't it true that UAE exports are around 30% oil? There are other sources of income of course, but cheap oil is bad for business, as paradoxical as it may seem.

Then I don't get how can they get the synergies in case they merge the airlines, they would have to move them to the same hub, right? Or can they operate from two hubs just 200Km from each other?

Another point is the Hub-and-Spoke model ME airlines have adopted. Isn't it true that the new Acs, the A350 and 787 are endangering this model? So in the near future pax can start flying "over" UAE and don't use all their fancy airports and infrastructure, am I correct?

On top of that, the huge investment made in first-class cabins and support infrastructure (lounges, etc) that the pax don't seem to be willing to pay for. 1st class is in less and less demand and most airlines giving up on it. Another hole.

As for the unmentionable, add all the bad investments they did. Their situation is not pretty, so who knows maybe the article is right.

It is true that UAE pockets are quite deep, but are they willing to keep burning money for years to come just to keep the airline afloat? I doubt they would declare bankruptcy, it would be humiliating, but even a merger would essentially mean pretty much the same thing.

Don't forget competition from Chinese airlines who have been quietly increasing their networks and lifting their game in the service area.

Whilst not as well located geographically for hub and spoke as the Middle East, they are a cheap and practical alternative for a fast growing region.

China Southern often come out cheapest on the Sydney- London route.

If delays due to airspace restrictions could be overcome, they would be stiff competition.

Not sure what your angle is but i think you should stop fishing.

Im curious, definitely something has to happen with the boys next door...... 6 months without a CEO? After dilapidating 5 billion, I doubt the owners will be willing to bet again. Looks like they are going down the Gulf Air road....and the rift is compounding the problem, as all airlines in the region are affected one way or the other.

my two rupees…
 

And don't forget the huge investment in OMAA airport terminal and airport infrastructure including roads flyovers etc etc.
We're hearing rumours that the partnership in our airline( India) is on shaky grounds due to differences in our airline's future strategy and growth .Whispers of an exit to a better suitor(s) being heard from different sources all the while a brave face being shown by the partners in marriage.

Interesting times ahead , masalama:ok:

Something else to add to the pot:

EU plans to lower bar for airlines complaining about foreign rivals

Also - steadily increasing its long haul capacity is QR!