Dubai on Monday plans to launch its second government-run airline - the third major carrier this decade to spring from the UAE. The new low-cost airline will cater to budget travelers in a region better known for opulence than bargains. Unlike their counterparts elsewhere, other Persian Gulf airlines vow to stick to plane delivery schedules, as their deep-pocketed patrons push ahead with ambitious airport expansions. The head of one Gulf carrier has even hinted at another headline-grabbing order at the upcoming Paris Air Show. But concerns are growing - particularly now that the global economic downturn has undermined demand for long-haul and premium air travel. Some analysts wonder if the region's airlines are stuffing their fleets too quickly with too many planes, much like Dubai's overzealous developers raced to build luxury apartment blocks that now largely stand empty. “Absent continuing growth in construction and services, you really don't need all those seats,” said Bob Mann, an independent airline consultant. “It's the rate of capacity growth that's the question.” The rapid expansion is redrawing the world's air routes: It is now easier to fly from Houston to Dubai or the Qatari capital Doha than to Rome or Beijing. Gulf carriers, which typically boast more generous in-flight services than Western competitors, enjoy increased business even as traffic falls most everywhere else. The International Air Transport Association said demand in the region grew 11.2 percent in April, extending a rare winning streak. Still, the trade group expects Middle Eastern carriers to lose a combined $900 million this year as traffic gains are overshadowed by even larger increases in capacity. In effect, the region is gaining market share but flying emptier planes.
