24 November 2017

People & Events


Up in the air
January 2004 12

When the history of civil aviation is written, 2003 will probably go down as the year when the Middle East rewrote the rules in the skies.

In the first half of 2003, it was the Middle East situation (Iraq War) that fuelled the downturn in the global aviation industry. But, ironically enough, towards the latter half of the year, it was a Middle East carrier (Emirates) that gave the industry a shot in the arm by placing the largest order in the history of civil history (worth $19 billion for 71 aircraft at the Paris Air Show). And, before the year was over, the aviation industry in the Middle East was making history again: two new airlines (Air Arabia and Etihad Airways) were launched in the UAE within the short span of a fortnight.
That’s for the history book.

For my picture album, I have two nice pictures to record history as it was being made. One, onboard Air Arabia’s inaugural flight. And the other onboard Etihad Airways on the big night when it took to the skies for the first time. No doubt, there were cheers all around and I have happy memories and two mementoes from the respective airlines for keeps.
However, I must add, that the two respective airlines were, quite literally, flying in two different directions. While Air Arabia is the region’s first low-cost airline and aims to make flying cheap by cutting down on cost, Etihad hopes to reinvent the way an airline works by offering top-quality service.
But whatever it’s that they are up to I can’t help but wonder whether there are far too many airlines for a small country with a population of just over 2.5 million. In fact, I remember peeping out of the window on both these inaugural flights just to see whether the UAE skies had got too crowded!

With Air Arabia and Etihad Airways the number of national carriers in the UAE has shot up to four (Emirates and Gulf Air being the other two) and reports have it that menaJet is all set to take off soon too even though it’s not going to be designated a national carrier. However, when that happens, it will take the number of airlines in the country up to five. And, mind you, I haven’t taken Gulf Air’s all-economy Gulf Traveller into account here.
Of course, both these airlines and they will promptly tell you that they had done their homework before launching. In fact, they now claim to have done exceedingly well in the last couple of months that they have been in service.

I am not disputing their claims. All I am saying is that the pie in the sky is not getting any bigger and with two more airlines to share the spoils, they may end up choking each other.
But, having said that, the bigger players (Emirates and Gulf Air) have gone on record to say that they are not threatened by low-cost carriers. However, things could change both for Emirates and Gulf Air and Air Arabia when menaJet, which will also be  Sharjah-based like Air Arabia, jumps into the fray. As past experience in Europe and America shows, these low-cost carrier may well force the larger airlines to rework their fares as customers start demanding cheaper tickets.
The difference between regional travel in the Gulf and, say, Europe, is worth highlighting here too. The vast majority of Europeans are mobile, have passports and face few of the frustrating visa restrictions which will surely continue to discourage many potential travellers within our region.

And what about Etihad Airways? While Emirates may not really be effected by it as the latter will operate from Abu Dhabi, there’s no denying that it will blow a dent in Gulf Air’s belly - what with the new airline competing largely on the same routes. I, for one, was quite surprised to see Gulf Air’s president and chief executive James Hogan arriving at the new airline’s launch ceremony in GAMCO, brimming from ear to ear. Of course, I was not so surprised when I saw him making a quick exit as we wound our way to the aircraft.
Never mind. My point is this: why did Abu Dhabi launch its own airline when Hogan is apparently turning around Gulf Air, in which the emirate holds a 33-per-cent stake?

There are no clear answers and neither the management at Etihad nor at Gulf Air is making a good attempt to clear the air. Not surprising then that rumours that Abu Dhabi will withdraw from Gulf Air now that it has its own national airline is gaining credibility. And, if that happens, it’s difficult to say whether Bahrain and Oman would want to shoulder the airline, which is still reeling under heavy debt or, like Qatar before it, simply withdraw from the scene. In other words, Etihad’s arrival could spell Gulf’s Air departure.
But then, there are speculations and speculations. For now, Hogan certainly has his firmly feet on the ground and his planes in the sky. What happens as the dust settles down and the mist clears up will be interesting to see.

Personally, I feel it is not in the Middle East skies that the real battle will be fought. It will be waged on distant horizons. As the bigger game unfolds to win landing rights for new destinations, we will know where the players stand. For instance India, which is a key target market, has an extremely restrictive policy and doesn’t give landing right easily. And apparently even if it does, it will only be after a lot of money has exchanged hands, as the vice-chairman of a Mediterranean airline which has been trying to get landing rights to India for the last two years confided in me. On the other hand, countries with open skies policy are mostly saturated.
Hopefully, the air will clear up sooner than later.




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