Dubai: British Airways yesterday announced that it will fly 66 weekly flights from eight GCC markets to London Heathrow this summer, a 35 per cent increase in capacity from the previous summer. While the global aviation industry is facing pressure on load factors, the airline is cutting back on routes to markets that have been hit harder by the economic downturn, such as the Far East, and focusing on the Middle East market. The International Air Transport Association (IATA) forecast a global industry loss of $2.5 billion (Dh9.1 billion) for the year, and the Middle East will have a share of $200 million.

Paolo De Renzis, the recently appointed British Airways commercial manager for the region, said, "Considering the current economic situation, it is one of the few places for us where we grow business rather than shrink." The airline’s 66 flights from the GCC to London Heathrow will include three daily Flights from Dubai, daily Flights from Abu Dhabi, Muscat (Oman), Kuwait, Bahrain and Qatar, and five weekly services from both Riyadh and Jeddah, respectively, where it is resuming its flights at end of next month.

The airline expects a loss of Dh791 million for this financial year ending March 31, but nonetheless has high expectations for the region. Twenty million passengers passed through Heathrow’sTerminal 5 in the past six months with the airline, and 370,000 were Middle Eastern passengers. Merger talks that began in the middle of last year between British Airways and Spain’s Iberia will come to a close in the coming weeks as "discussions are progressing well," according to De Renzis.

He said that the merger would result in more access to South African markets but no impact would be felt in the Gulf. "Consolidation is key for the survival of the industry," he said. Fares are dropping as travellers become more conscious of spending. De Renzis said that the airline would probably be reducing fares further to fill the increased capacity around the region.

"There is a lot of competition in the airline industry. Fares will play a key role in game." In the past year, a 40 per cent drop in fares has occurred in the Gulf. The airline has revised its fuel surcharges twice in the past six months, and says that it will only consider short-term changes.  De Renzis said that the airline hedged fuel prices for 50 per cent of its requirement for 2009. Without revealing the exact price, he said that they were at end-2008 levels, when prices fell below $40 per barrel.

source:  www.gulfnews.com