Air passenger flows to and from the Gulf are expected to reach 140 million by 2015, led by the region’s big three carriers, but there will be significant challenges as these airlines pursue aggressive expansion plans, Boston Consulting Group (BCG) has warned.

In its latest report, BCG says that Middle East airlines — led by Emirates, Etihad, and Qatar Airways — are expected to triple their capacity over the next 20 years.

Emirates, the region’s largest carrier, is on track to become the largest operator of wide-body aircraft in the world by 2016, with Qatar Airways and Etihad not far behind in the ranks of the top 20, the report added.

At a time when many carriers throughout the world were struggling with weak growth in overall demand, Emirates’ performance over the past few years stands out as “exceptional”, the report said.

The carrier has nearly tripled capacity and passenger revenues over the past five years, adding 32 new destinations while improving aircraft utilisations, load factors and yields.

Although the company’s cash margins decreased from 28 per cent to 23 per cent during the past five years, they still compare favourably with those of other international airlines, the report found.

Emirates’ financial strength gives it greater flexibility to expand capacity and boost market share.

BCG estimates that Emirates will increase its capacity by up to 12 per cent annually through 2015, with a key to its growth being the considerable savings it enjoys compared with other legacy carriers in terms of fuel and operating costs.

Emirates is in the midst of consolidating to three types of aircraft — Boeing 777s, Airbus A380s, and the Airbus A350s — giving it a younger fleet and simplifying its maintenance and crewing operations.

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