Decline and growth, privatization and protectionism in the Middle East airline industry

Abstract

The changing international air transport environment creates challenges for the management of the national airlines in the Middle East. The rapid development of this area's civil aviation market in the last decade and the liberalization of the European civil aviation industry embody risks but also enormous opportunities for Middle Eastern airlines. The international airline industry has, during the early 1990s, suffered financial losses that may very quickly force it into accepting fundamental changes. These changes may result in a largely unregulated, competitive oligopoly. In such an environment a new approach is required by Middle Eastern airlines. The authors suggest that the long-term prospects for Middle East air transport are improving, and that the Middle East is likely to become an aviation junction again. This paper emphasizes recent changes in Middle Eastern airlines and government policy, which are expected to help develop a more efficient and coherent air industry, and, as result, expedite industry growth. However, when and to what extent a free market in aviation ensues still remains to be seen.