Middle East airlines expected to ride out delivery delays

December 24, 2024, 8:17 AM

The Airbus site at Bristol in the UK. The company has been negotiating engine problems with provider Rolls-Royce

2025 deliveries revised down 20%
795 aircraft due in Middle East by 2030
Iata predicts continuing growth

Aircraft delivery delays will continue to dog Middle East airlines in 2025, according to the International Air Travel Association (Iata).

The issue will have little bearing on the bottom line, however, and the industry is expected to continue growing regardless.

Globally, Iata forecasts that 1,802 aircraft will be delivered over the next 12 months, down more than 20 percent on the previous expectation of 2,293.

The industry body cautioned that further downward revisions are “quite possible” as US plane manufacturer Boeing wrestles with safety certification issues and its French counterpart, Airbus, negotiates engine troubles with their maker, Rolls-Royce.

A report by the aviation consultancy company OAG revealed that the 10 largest airlines in the Middle East have a total of 795 aircraft on order and scheduled for delivery at dates up to the end of 2029.

Airbus estimated in July that around 58 percent of all new aircraft deliveries will be for network expansion.

Kamil Alawadhi, regional vice-president for Africa and the Middle East at Iata, said at the Bahrain Airshow last month: “Not being able to plan your summer schedule because you’re not sure if your aircraft are arriving or not, or whether you’ll be able to increase or reduce your frequencies, all hamper the business. You have to have visibility three to five years down the road.”

The collective order book for Emirates Airline, Etihad Airways, Qatar Airways and Flydubai in 2025 currently stands at just over 50 aircraft, split between Boeing and Airbus.

John Grant, a partner at the UK consultancy Midas Aviation and an AGBI columnist, says he is not optimistic that these would arrive in the next 12 months.

“I suspect that they will already be planning on the assumption that not all of those will be delivered on time,” he says.

The Dubai flag carrier, Emirates, has spent $4 billion on a retrofitting programme. Adel Al Redha, deputy president and chief operations officer of Emirates Airline, says: “That’s the price we had to pay for the delay of the aircraft.”

Orders of Boeing 777X aircraft were scheduled to arrive in 2021 but have since been put back to 2026, in part because of ongoing safety certification concerns and labour issues. “It does present us with a serious challenge,” Al Redha says.

Boeing had an outstanding order book of 6,268 aeroplanes as at the end of November. In the current year up to that point the manufacturer delivered 318 planes, including 19 to companies in the Middle East and North Africa – DAE Aviation (6), Emirates (2), Etihad (3), Flydubai (4), Oman Air (1), Qatar Airways (2) and Royal Air Maroc (1).

Emirates took delivery of its first A350 aircraft last month, with its debut flight to Edinburgh scheduled for January. That first aircraft is to be followed by a further 64 A350s over the next four years.

The new Saudi airline Riyadh Air, backed by the country’s sovereign wealth fund PIF and due to start operations next year, has ordered 132 aircraft in total from both Airbus and Boeing. Deliveries are expected through to 2030.

Grant says: “They will obviously be getting a large part of what they expected since it’s as much a political development as a commercial necessity, and both aircraft manufacturers will want to avoid getting any high-profile negative publicity.”

Saudi Arabia’s Vision 2030 economic diversification plan aims to treble annual passenger traffic to 330 million by the end of the decade.

Airbus was contacted for comment.

The global backlog for new aircraft has reached 17,000, a record high, Iata says. At present delivery rates, this would take 14 years to fulfil, double the six-year average backlog for the 2013-2019 period.

Samir Majali, vice-chairman and CEO of Royal Jordanian, previously described the supply situation as “a really terrible disaster”.

However, it has had no impact on the profitability of the region’s carriers, which made $23 profit per passenger in 2024, Iata said. This is more than double the figure for the second-placed market, North America.

Iata expects the Middle East’s profit per passenger to rise four percent to $23.90 per passenger in 2025.

Tourism consultant David Tarsh says: “Middle Eastern carriers have a track record of investment in the latest equipment, are geographically well located to capitalise on macro trends, and are generally very well managed, so I’d expect them to weather delivery delays well and to remain highly competitive.”