Abu Dhabi’s aviation ambitions up in the air

The Midfield Terminal Abu Dhabi International Airport. Completion of the new building, which will increase capacity to 45 million per year, has been delayed until 2019. Courtesy, ADAC
Updated 23 April 2018
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Abu Dhabi’s aviation ambitions up in the air

  • Passenger traffic at Abu Dhabi International Airport fell 11 percent in the first quarter
  • Etihad Airways this month cut routes to Edinburgh and Perth

LONDON: The inaugural non-stop Qantas flight between Perth and London last month may have been hailed as the future of aviation by the airline industry, but it’s unlikely to have prompted much celebrating in Abu Dhabi.

The prospect of ultra-long haul flights, which reduce journey times by cutting out the need for stopovers, strikes at the heart of the business model of the likes of Dubai and Abu Dhabi, which have risen to prominence in recent years as major transit centers for global air travel.

“The Gulf airports burst onto the scene as the airframe technology changed and the long-haul hubbing model was created,” Andrew Charlton, the managing director of consulting firm Aviation Advocacy.

“The Qantas flights from Perth show that the technology is again changing; in the end, the technology always wins.”

Mr. Charlton cautioned that the impact in the short-term on Abu Dhabi and other hubs would be minimal, noting that ultra-long haul would not be available to most passengers.

What’s more, “the market demographics and the economics of hubbing (still) make airports in the Gulf very attractive,” he said.

But ultra-long haul travel is just the latest in a series of issues impacting Abu Dhabi’s aviation strategy, with progress slowing in the wake of lower oil prices and operational issues at Etihad, the emirate’s flag-carrier.

The high-profile Midfield Terminal at Abu Dhabi International Airport, designed to expand capacity to 45 million passengers per year, has faced numerous delays, with its expected opening date pushed back from late-2017 until the end of 2019.

The increase in capacity, designed to coincide with the growth of Etihad Airways, no longer seems as urgent a priority, as the emirate cuts back on spending in the wake of lower oil revenues. Meanwhile, Etihad’s international expansion strategy, launched in 2011, is now very much on hold.

Etihad’s strategy of acquiring a series of stakes in global airlines, in a bid to transform itself into a global rival to the likes of Dubai’s Emirates, hit the buffers last year, with the bankruptcy of Alitalia and Air Berlin, two of its largest interests. Etihad subsequently sold its stake in European regional carrier Darwin Airline, with rumors earlier this month that it may also look to offload its stake in Virgin Australia, after the latter canceled its last route to Abu Dhabi earlier last year.

Etihad did not respond to a request for comment.

The loss of some of Etihad’s international operations has taken its toll on Abu Dhabi’s passenger traffic. Abu Dhabi Airports has not released traffic figures for 2017, but passenger numbers for the 11 months to the end of November fell 3.7 percent year on year to 21.5 million.

That trend appears to have deepened so far this year; Abu Dhabi Airports last week announced an 11 percent drop in passenger traffic for the first quarter of the year, falling to 5.5 million, with aircraft movements dropping 15 percent to 35,788.

The drop in cargo was even more pronounced, falling 25 percent year on year to 142,492 metric tons.

Traffic through the emirate is “likely to see further reductions,” said John Strickland, director of JLS Consultancy.

Earlier this month, Etihad announced it was cutting flights to Edinburgh and Perth in Australia, as part “of several adjustments that we are making to our network in 2018 in order to improve system profitability,” according to an Etihad spokesman. This followed the axing of its Dallas route late last year.

Mr. Charlton said that Abu Dhabi’s hub strategy remains solid for the moment, but that the loss of Alitalia and Air Berlin “certainly slows things down.”

Abu Dhabi Airports did not respond to a request for comment.

“We are continuously working toward fortifying Abu Dhabi International Airport’s presence as a key airport hub within the region, by enhancing our existing network and connecting with new and wider markets globally,” said Saoud Al Shamsi, the acting chief commercial officer of Abu Dhabi Airports, in a statement coinciding with the Arabian Travel Market exhibition in Dubai.

“We are optimistic about the sector’s performance in the coming years that will continue to be key in our efforts to implement enhancements to our services.”


Libya’s NOC declares force majeure on El Sharara oilfield

Updated 18 December 2018
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Libya’s NOC declares force majeure on El Sharara oilfield

  • El Sharara — a 315,000 barrels a day field was taken over on Dec. 8 by groups of tribesmen, armed protesters and state guards demanding salary payments
  • Some government officials favor offering quick cash to the occupiers to make them leave, but NOC officials have warned that would set a precedent

TRIPOLI: Libya’s state oil firm NOC has declared force majeure on operations at the country’s largest oilfield, El Sharara, a week after it announced a contractual waiver on exports from the field following its seizure by protesters.

The 315,000 barrels a day field, located in the south of the North African OPEC member country, was taken over on Dec. 8 by groups of tribesmen, armed protesters and state guards demanding salary payments and development funds.

Officials have been unable to persuade the groups, who have been camping on the field, to leave the vast, partly unsecured site amid disagreements how best to proceed, workers on the field said.

Some government officials favor offering quick cash to the occupiers to make them leave, but NOC officials have warned that would set a precedent and encourage more blockades, workers at the oilfield say.

NOC has described the occupiers as militia trying to get on the payroll of field guards, a recurring theme in Libya where many see seizing NOC facilities as an easy way to get heard by the weak state authorities.

Production will only restart after “alternative security arrangements are put in place,” NOC said in a statement.

Operations at the smaller El Feel oilfield continued as normal, engineers said.

“Production at Sharara was forcibly shut down by an armed group — Battalion 30 and its civilian support company — that claimed to be providing security at the field, but which threatened violence against NOC employees,” NOC Chairman Mustafa Sanallah said in the statement.

His comments came after the chief of staff of the Tripoli-based government, Abdulrahman Attweel, criticized some of Sanalla’s previous comments about the protesters as “irresponsible.”

“These people (guards) were there to protect the field without salaries and without any attention to them and their daily needs, not in terms of accommodation, supply, transportation and communication,” Attweel told Al-Ahrar channel late on Monday.

Their demands were legitimate, he said, echoing comments by some southern lawmakers and mayors demanding more jobs and development for the neglected region.
The blockade has been complicated by the presence of tribesmen, who have argued against quick cash payments saying they want funds to improve hospitals and other services, which might take time to deliver.

The shutdown of the El Sharara has not affected the El Feel oilfield, also located in the south. It continued to pump around 70,000 barrels a day, field engineers said.
Its exports were being routed via the Melittah oil and gas port, which like El Feel belongs to a joint venture NOC has with Italian energy company Eni, another engineer said.

A spokesman for NOC did not respond to a request for comment.
El Sharara crude is normally transported to the Zawiya port, also home to a refinery. NOC runs the field with Spain’s Repsol , France’s Total, Austria’s OMV and Norway’s Equinor, formerly known as Statoil.