Low cost carriers in the Middle East and North Africa (MENA) region: Emergence and barriers to development

Abstract

This paper investigates the development of low cost carriers (LCCs) in the Middle East and North Africa (MENA) region from a broader perspective. We use passenger volume data at the airline and flight segment levels to illustrate the development of LCCs in the region; we conduct a structured comparison of the actual business model characteristics of the MENA-based LCCs to assess their adherence to the archetypical LCC business model; and we compile the key barriers to LCC growth in MENA from the literature. We find that the overall market share of LCCs in MENA is still below the world average-despite high growth in recent years. The presence of LCCs varies considerably between MENA countries and route groups. The more upscale, "Jetblue"-style business model, where passengers benefit from additional, complementary services or product characteristics, prevails. Political tensions, adverse regulations and lower levels of liberalization compared to Europe or North America negatively affect LCC development in many MENA countries. While low middle-class proportions appear to be a challenge for low cost business models, Asian diaspora and tourism-from beach holidays to pilgrimage-seem to induce additional demand.

A Century of the Global Airline Industry and the Emergence of the Gulf’s Super Connectors

“…Airfields and routes such as the Sharjah-Bahrain-Dammam-Kuwait-Basra-Mosel were strategically developed to carry expatriates and local merchants to and from the oil fields (Watson, 2013). Later, these wealthy Gulf states played a pivotal role in mapping the international aviation arena (Joshan and Maertens, 2020). The emergence of airline companies such as Emirates, Etihad, and Qatar Airways has allowed millions of people to exploit the region's unique geography and culture.…”

“…The airline industry's growth in the Gulf states reflects their strong business practices and geopolitical influence (Joshan and Maertens, 2020).…”

National Competitive Advantage Perspective of Global Aviation Hubs: The Middle East Big Three

“…Feiler and Goodovitch 1994;Joshan and Maertens 2020;Tretheway and Andriulaitis 2015;Warnock-Smith and O'Connell 2011;Wit 2014), none of them examined the success of the MEB3 from a national competitive advantage perspective. Existing studies have focused on aviation policy (Feiler and Goodovitch 1994;Warnock-Smith and O'Connell 2011), the impact of aviation growth in the Middle East on incumbent airlines and low-cost carrier development (Joshan and Maertens 2020;Morrison and Mason 2016;Vespermann et al 2008), and competition between Gulf carriers and European carriers (Tretheway and Andriulaitis 2015;Wit 2014). This study uses Michael Porter diamond (Porter 1990) to investigate the determinants for the competitiveness of Gulf aviation industry.…”