The resumption of Gulf flights to Europe reduces the gains of Asian aviation economy

Reuters reported that Asian airlines – which attracted more passengers and raised ticket prices for their flights on European routes following the outbreak of the Iran War – began to lose these advantages as Gulf airlines resumed operating their flights and offered lower ticket prices.

This gradual shift has raised doubts about the ability of airlines – including Singapore Airlines, Cathay Pacific Airways, Korean Air, and ANA Holdings – to maintain a large portion of the market share they gained during the period of turmoil.

Serem data showed ⁠ ⁠⁠ ⁠ that Emirates Airlines, Qatar Airways, and Etihad Airways transported about a third of passengers from Asia to Europe, and more than half of the passengers from Australia and New Zealand to Europe, before the outbreak of war.

Major airports in the Gulf were closed with the outbreak of the Iran war on February 28, but air traffic recovered by mid-June to return to about 90% of its normal levels, according to Flight Radar 24 data.

According to data from the International Air Transport Association (IATA), between last March and May, airlines in the Middle East witnessed a noticeable improvement, recording a decline of 28% compared to about 60% a year ago.

While the number of passengers on direct flights from Asia to Europe rose by about 30% year-on-year in March, this increase declined to ⁠⁠⁠⁠⁠⁠⁠⁠15% by last May.

A Korean Air spokesman said that the company recorded a year-on-year increase in seat occupancy rates on its flights to Europe between March and May, but demand declined as Gulf airlines resumed operations during the second quarter.

ANA Holdings, which has not yet announced May data, said that the seat occupancy rate on its European flights fell from 93.1% in March to 86.9% in April, but it remained higher by about 8.7 percentage points compared to ⁠⁠⁠⁠⁠⁠⁠⁠In the same period last year.

Cathay Pacific reported that seat occupancy across its network in May rose by 2 percentage points year-on-year to 86.8%, compared to an increase of 9.5 percentage points in March to 92.2%.

Independent aviation analyst Brendan Sobey said that the data indicates a gradual and not a sudden rebalancing, noting that the performance of Singapore Airlines clearly embodies this trend.

The airline’s seat occupancy rate on Europe flights rose 13.8 percentage points in March, but the gains shrank sharply to 4.9 points in April and just 1.1 points in May.