There have never been more exciting times for the airline industry in the Gulf, and by all acounts, 2003 was a momentous year for both the established carriers and the new kids on the block.
TTN spoke to six regional carriers – which included the two new players from the UAE – and found them all flying high and recording growth.
Emirates went about setting new profit records, Gulf Air said it is bang on course to get back in the black; budget airline Air Arabia got off to a flying start; and so did the other newcomer, Etihad Airways.
Oman Air shrugged off the effects of the Iraq War and the SARS crisis to record 18 per cent growth, while Qatar Airways posted impressive growth figures of 40 per cent.
All the carriers were extremely bullish about prospects for the new year; and spoke of plans to introduce new destinations, improve services and boost their market share.
How the airline has performed since its launch: We have recorded an incredible start, says Adel Ali, CEO Air Arabia. Aside from the extensive attention from the media and public alike, the airline has registered 55-60 per cent load factor on most routes despite the fact that it was a quiet travel season during the launch month (October, 2003).
Strategy adopted to face up to the downturn in global economy: The main strategy of Air Arabia is to provide safe, efficient, reliable, and cost-effective means of air travel from Sharjah International Airport to points in the Middle East, North Africa, and the Indian subcontinent. Ultimately, Air Arabia aims to stimulate the airline industry in the region via encouraging people to travel more frequently and easily. Air Arabia’s core selling point is its pricing structure – this has appealed to the masses despite the downturn in the global economy.
Are things going according to plan? Certainly. We have expanded our destination list, our travel agents network, and our General Sales Agents network and are working hard to accommodate the rising demand on our travel services.
Expansion plans: There are plans to operate new routes from the 1st week January 2004. These will include Isfahan and Shiraz (Iran), Colombo (Sri Lanka), Doha (Qatar). We also plan to expand our fleet early on this year to four Airbus A320 aircraft, flying to more destinations.
Strategy in the face of competition: We welcome competition as it will help us educate consumers about our airline and the services we offer.
Is Air Arabia bullish about 2004 and, if yes, why? We are certainly bullish about the new year. With the introduction of new destinations, increased flight frequency and fleet expansion, we can offer our customers a complete cost effective, yet safe, efficient and reliable travel experience.
What the traveller can look forward to: The traveller can look forward to competitive travel opportunities throughout the region. Air Arabia will always introduce attractive promotions and favourable flight frequencies.
How the airline performed: Emirates achieved record half-yearly profits of Dh 612 million ($167 million), 51 per cent up on the same period in 2002, thanks largely to a series of initiatives to upgrade customer service. Higher passenger and cargo yields more than offset a small short-term fall in seat factors during the SARS outbreak and Iraq conflict.
Sheikh Ahmed bin Saeed Al Maktoum, Emirates’ Chairman, said: “These results confirm that our policy of tailoring services tightly to meet customers’ needs is proving highly successful, and helping us to exceed even our own growth expectations.”
Emirates became the first airline in the world to operate the new ultra-long range Airbus A340-500 when the first of its planned order of eight landed in Dubai in October and flew last month on its first non-stop commercial service to Sydney. As Maurice Flanagan CBE, Emirates’ vice-chairman and group president; said: “At a stroke, this makes journeys shorter, more convenient and more comfortable for our passengers.” To complement this, Emirates transformed onboard service – in all three classes. This remarkable aircraft is set a new benchmark in air travel and offer our customers new standards in comfort.
Expansion plans: There are plans to open six new destinations this year including gateways in the US, Scotland, central Europe, China and West Africa in a network expansion spread across four continents. On anuary 2, the airline's operations in Africa leaps forward with flights to Lagos and Accra. On April 10, Shanghai, Emirates' first destination in mainland China, and Glasgow, the airline's fifth point in the UK, come on line. On 1 May, flights to Vienna in Europe's heartland, will start. And in June, Emirates plans to launch a new, non-stop service to the USA.
Sheikh Ahmed said: “In 2004, Emirates will fly further than ever before to reach our goal of a truly global airline. We will open destinations where we know there is demand with services that meet passengers requirements using the very latest technology.”
What travellers can look forward to: Emirates is investing heavily in improvements to its customer service. It has $26 billion worth of new aircraft on order and is constantly expanding its route network. Besides recent customer service improvements which include the opening of a dedicated new first and business class check-in terminal at Dubai International Airport, self check-ins for frequent flyers, and online internet booking facilities, work is also under way on building a dedicated new Dubai passenger terminal and launching a series of in-flight innovations to attract customers to First and Business class.
How the airline performed: In the short time after our its launch: We are more than meeting our targets and objectives, says Richard Bate, communications & product development manager, Etihad Airways. At this stage, we are still concentrating on fine-tuning our performance so that every aspect of our operations is working to the very high standards we have set ourselves. Our guests are aware that Etihad’s service is already a cut above the ordinary – both on the ground and onboard. The feedback we are getting is hugely encouraging and our service will get even better with time.
Strategy adopted to face up to the downturn in global economy: Etihad’s strategy right from the beginning has been to do things not only differently, but better. The airline industry internationally is characterised by a sameness, with relatively little to offer by way of innovation. At Etihad, we are breaking away from the routine – from the way we categorise onboard zones to the food we serve and the way we handle check-in services. There’s a clear market opportunity that we have identified irrespective of the global business environment. Otherwise, we would not have been so daring as to launch a new airline at this time.
Are things going according to plan? Very much so. We have achieved our planned destinations and are even ahead of schedule in some respects, like our introduction of services to the Indian subcontinent. Load factors are meeting or exceeding our projections, so our plans are very much on track in every respect.
Expansion plans: We will soon be fully operational to Far East routes and a London service will be in place by spring. Our fleet will expand accordingly – based on the 225-passenger Airbus A330-200 that is the exclusive choice for our fleet.
Is Etihaad Airways bullish about 2004 and, if yes, why? Of course, we are! 2004 will see our first full 12 months of operating and will see rapid growth in our destinations, service frequencies and load factors. As I explained earlier, we have some unique factors working in our favour so we have every reason to be bullish.
What the traveller can look forward to: Here let me repeat what our chairman, Dr Sheikh Ahmed Bin Saif Al Nahyan said on the occasion of our inaugural flight: “Etihad has the distinction of being designated ‘The National Airline of the United Arab Emirates’ and I can assure you that we do not take that responsibility lightly. As our fleet of aircraft grows, and our network of destinations expands across the Middle East and beyond, Etihad will be the standard-bearer for excellence.”
How the airline performed: Gulf Air exceeded expectations, says James Hogan, the airline’s president and chief executive. We met our financial targets and have reduced the loss by 50 per cent to BD20 million.
Strategy adopted to face up to the downturn in global economy: Strict corporate and financial discipline, innovation and creativity, all guided by a customer centric vision.
Did things go according to plan? The first phase of our three year plan was successfully executed despite other variables including regional tensions, the conflict in Iraq and later the SARS virus.
Expansion plans: We intend to move forward but will expand based on customer requirements and commercial viability.
Is the airline bullish about 2004 and, if yes, why? We have a strong brand, excellent people and good products. Our achievement in a year of challenges and economic adversity gives us every reason to believe that we will be able to meet the challenges the new year brings.
What the traveller can look forward to: Continued focus on customer service, service excellence, innovation and Arabian hospitality in every area of the airline.
How the airline performed: In the first half of the year, we had to face the fallout of the Iraq War and also SARS but the second half of 2003 was healthy for Oman Air and we recorded 18 per cent growth, says Abdul Rahaman Al Busaidy, CEO, Oman Air.
Strategy adopted to face up to the downturn in global economy: We focused on our niche markets and the regional business. We tried to stimulate the domestic market by promoting the northern part of Oman by offering innovative packages. So, instead of just visiting one place visitors had the chance to see all of Oman thanks to our attractive packages at reasonable prices. In fact, we managed to sell 2,500 packages in the last three months.
Did things go according to plan? We had expected higher growth in the first half of the year so we can’t say things went according to plan at least till June 2003. But yes, things picked up in the second half of 2003 and things went according to plan.
Expansion plans: We are focusing on niche markets and will be adding two new airplanes to our current fleet (nine). Also, we plan to fly to Delhi and Hyderabad as well.
Strategy in the face of competition: On the face of it, there’s competition with two new airlines arriving on the scene. However, since Air Arabia is a low-cost airline it will stimulate the market and we are not a no-frills carrier. On the other hand, Etihad will be serving those markets which are not served by Oman Air from the UAE.
What travellers can look forward to? Value-added products will be introduced and we will add new routes and increase our fleet.
How the airline performed: It has continued to record 40 per cent passenger growth rates.
Strategy adopted to face up to the downturn in global economy: Qatar Airways has proved itself to be one of the fastest growing airlines in the world, says Akbar Al Baker, CEO. Building on a reputation of premium customer service, the airline has launched an aggressive growth plan to ensure that it can offer people a greater choice of destination, a greater choice about when they fly to a destination, and the latest inflight products and services.
In September 2003, Qatar Airways became the first airline in the world to pass the new International Air Transport Association’s (IATA) Operational Safety Audit (IOSA), with 100 per cent compliance. The independent airline quality monitor, Skytraxvoted Qatar Airways’ cabin service best in the Middle East and fifth best in the world and the United Kingdom’s Institute of Transport Management recently voted Qatar Airways as Best Middle Eastern Regional Airline in 2003.
Did things go according to plan? Very much so.
Expansion plans: Qatar Airways currently flies to 48 destinations worldwide. Within the coming two years, that is projected to rise to 60. Ten new destinations were added in just nine months of 2003 expanding the choice of destinations in Europe, North Africa, the Far East, South East Asia and the Indian subcontinent.
Following the announcement of a major deal for 34 new aircraft in the summer of 2003, the airline has placed further orders at the Dubai Airshow in 2003, signing a contract with Airbus for 14 planes, including four firm orders and 10 options, a deal valued at $3 billion.
The deal extends Qatar Airways’ previous order to buy 34 Airbuses, worth $5.1 billion, placed at the Paris Air Show last June, by $1.2 billion. Qatar Airways currently has 29 aircraft; there will be over 50 in the fleet by 2008.
Is Qatar Airways bullish about 2004 and, if yes, why? Yes, it has grown remarkably since its first launch in 1994 and its relaunch in 1997. It hasn’t suffered from the global turndown in travel and has instead experienced an upsurge in demand for its passenger and cargo services that is likely to increase further in 2004 as the network and fleet continue to expand and Qatar markets itself even more widely as a tourist destination.
What the traveller can look forward to: Qatar Airways has signed an agreement with the global reservation company Infini, which will allow customers in Japan to book seats on Qatar Airways flights through more than 6,000 travel agencies. Japanese travel agencies using the Infini reservation system can now book their customers directly on any Qatar Airways flight, including those from Bangkok, Seoul, Shanghai, Jakarta, Singapore, Cebu, Manila, and Kuala Lumpur. There will be further expansion of the network and travellers will continue to enjoy increased services and facilities at Doha international airport (including the Al Maha Meet and Greet Service).