Gulf carriers aim for top spot in global travel
Gulf carriers have underlined their ambition to redraw world travel maps and turn the region into a global hub by placing record orders for new planes at the Dubai Airshow closing on Thursday.travel Updated: Nov 18, 2011 14:55 IST
Gulf carriers have underlined their ambition to redraw world travel maps and turn the region into a global hub by placing record orders for new planes at the Dubai Airshow closing on Thursday.
Aircraft manufacturers Boeing and Airbus have embraced the game-changing vision, built on the geographic advantages of these young carriers, although conventional airlines fear they will pay the price.
Huge orders for new planes placed by Dubai-owned Emirates Airlines, Abu Dhabi's Etihad Airways and Doha-based Qatar Airways were placed on the strength of the strategic location of the Gulf between the West and Asia.
At the prestigious show this week, Emirates ordered 50 of the long-haul Boeing 777-300ER for a record $18 billion, while Qatar Airways bought 50 Airbus A320neo single-aisles and doubled its orders for the long-haul A380 to 10.
"We have an ambitious and strategic plan to continue growing our international network and especially increasing our long-haul, non-stop routes," said the head of Emirates, Sheikh Ahmed bin Saeed Al-Makhtoum.
US manufacturer Boeing sees its Gulf customers as world players.
"The Gulf three don't view the Middle East as their market, they view the world as their market," Boeing's vice president for marketing Randy Tinseth told AFP.
Boeing's European rival Airbus are also tuned in, appreciating the growth potential for Gulf carriers in long-haul travel.
John Leahy, Airbus commercial director, likes to explain using a diagram that with a long-haul A330 or Boeing 777, 90 percent of the world population and two thirds of global wealth are accessible on a flight from Dubai.
With a superjumbo A380, the whole world is within reach.
Airbus forecasts that Dubai in 20 years will rank just behind Beijing and Hong Kong as a centre of world air traffic, while Boeing says the United Arab Emirates will become the world's third market for air travellers behind the United States and China.
"You don't need to have a huge population on the ground," said Tinseth. "You can grow in other ways, the way they have, by providing a non-stop service around the world."
For him, three factors explain the three Gulf carriers' rapid growth rate of 23 percent a year over the past decade: the region has a young population, large numbers of migrant workers and new emerging tourist destinations.
Leahy added a fourth element -- the opening of the aviation market in India, which has allowed Gulf carriers to penetrate the subcontinent market.
Coupled with progress made by traditional regional airlines and the emergence of low-cost operators such as Sharjah-based Air Arabia, launched in 2003, and flydubai, which began operations in 2009, the breakthrough of the Gulf big three justifies the manufacturers' upbeat forecast.
Boeing expects the region will need 2,500 new aircraft in the next 20 years, a market of $450 billion. Somewhat more conservatively, Airbus expects a market for 1,900 planes worth $347 billion.
But Richard Aboulafia of the US-based Teal Group said that air traffic will not accommodate such an expansion of fleets.
"There is no way to make the numbers work without taking an enormous amount of traffic from the legacy carriers, European and Asian," he said.
Air France-KLM, British Airways and Lufthansa are already complaining of unfair competition. They accuse the newcomers of benefiting from lower fuel prices in the energy-rich Gulf and government funding, including for aircraft purchases.
"It is an industrial policy. This works as long as Gulf governments commit the cash to it," Aboulafia said.
But the UAE are used to beating predictions.
Dubai was mocked when it decided in the 1970s to build dry docks for large ships when nearby Bahrain already had one deemed good enough for the Gulf. The port of Dubai is now one of the busiest container terminals in the world.
When in 1985, Dubai launched its own airline, competing with Gulf Air operated by Abu Dhabi, Bahrain, Oman and Qatar, the skeptics were many. The rest is history.
Emirates is the largest single customer of the A380 with 90 units, and the largest operator of Boeing's long-range 777s. It also placed orders for 70 Airbus medium-size, long-range Airbus A350s, whose production is facing delays.
Qatar Airways is the lead and largest customer for the A350 with orders for 80 aircraft. The aircraft is aimed at competing with Boeing's 777 and 787 Dreamliner which has just entered service.
The Qatar flag carrier has ordered 70 Dreamliners.
Abu Dhabi's Etihad, which was launched in 2003, now operates a fleet of 63 planes to 72 destinations. It has firm orders for 100 aircraft, including 10 A380s and 31 Boeing 787s.
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First Published: Nov 18, 2011 14:55 IST