Emirates Airline is adding capacity on its flights to the Lebanese capital Beirut even as unrest in the region affects the country’s economic outlook.
The airline will upgrade both aircraft that operate the route to the wide-body Boeing 777.
Emirates has twice-daily flights to Lebanon.
A Boeing 777-200LR will replace the Airbus 330-200 from June 1, boosting seat capacity by 12 per cent, Emirates said. A Boeing 777-300 will take over from the other A330-200 from January 1, adding 53 per cent more capacity.
The weight of refugees fleeing from the violence in neighbouring Syria and the threat of a spillover effect from conflict in the region have hit the country’s macroeconomic prospects despite a boost from lower oil prices.
In December, the ratings agency Moody’s downgraded Lebanon’s government bond ratings to B2 from B1 and reaffirmed its negative outlook.
Among the reasons it specified were “adverse effects from the Syrian crisis on government finances, economic growth and political stability”.
Tourism took a hit in the summer of 2013, when Arabian Gulf countries including the UAE issued travel warnings to their citizens amid the threat of kidnappings. The United States and United Kingdom have also issued travel warnings.
The number of Arab visitors to Lebanon declined by 12.2 per cent to 402,080 in 2013 over 2012, out of a total of 1.27 million tourists in 2013.
Gulf countries lifted their travel warnings in May last year.
The tourism minister Michel Pharaon said last month that the number of Saudis visiting Lebanon in February was up 65.5 per cent compared to a year earlier.
In February, occupancy rates at Beirut hotels rose by 24.7 per cent year-on-year to 49.3 per cent and room rates rose 29.7 per cent year-on-year to US$73.28, still among the most affordable in the region, according to the consultancy STR Global.
Emirates’ decision to increase capacity is in response to “healthy passenger demand”, said Sheikh Majid Al Mualla, the divisional senior vice president for commercial operations at the airline.
Emirates did not immediately respond to requests for more detail about where the added demand was coming from.
Analysts said that the carrier would meet extra demand from Lebanese expatriates visiting home during the summer, with about 150,000 Lebanese living in the UAE and about 1,500 Lebanese-owned businesses operating in Jebel Ali Free Zone alone.
“Lebanon, despite its neighbours being in dire straits, is still a high-yield market for passengers, tourists and trade,” said Saj Ahmad, the chief analyst for the London-based consultancy StrategicAero Research.
With interest low from other airlines, Emirates could dominate the lucrative market this year.
The Lebanese national carrier Middle East Airlines, for example, is unlikely to offer much competition as it struggles to shed loss-making routes, according to Mr Ahmad. “It’s partly because of this semi-lethargic attitude that Emirates and flydubai have stepped into Beirut and carved out a sizeable market here,” he said.
Flydubai, which started its Beirut services in 2009, has three flights a day and adds an extra flight during peak seasons such as Christmas, Eid Al Adha and school breaks.
“The demand comes from Lebanese expats working in the UAE who tend to go home for both visiting families and for tourism,” said Filippo Sona, the director at Colliers International in the Middle East and North Africa.
Emirates’ cargo operations are also planning to offer greater freight capacity on the route.
There will be extra cargo capacity of 560 tonnes per week in and out of Beirut this year, according to Emirates SkyCargo.
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