New Emirates order....

[General Lee]

Nope...most governments understand that open (or more open) skies in the long run is good for the consumer & jobs.

Look at what it has done for American jobs with Boeing, the US's largest exporter (EK are their largest 777 customer). The inertia has always been towards the direction of freer markets...

You couldn't stop RJs (in fact your mgt orgied on them) and you couldn't stop LCCs, customers love them.

And you you won't stop the Gulf 3...AA, AF, QF & BA have just shown you that.

The ball is rolling...you won't stop it.

You guys sound like the bank tellers when ATMs hit the street - kicking and screaming until no one cared, because the product is what the market wanted.

fv

Wait, we did stop RJs---200 plus 50 seaters are getting parked now. The LCCs were also stopped, most haven't come close to the revenue the big 3 legacies make. And the big 3 Gulf carriers will be stopped by lack of infrastructure and slots at Major US airports. There may be a flight here and there added, but nothing too damaging, except to connecting India and Pakistan travel. Otherwise, a couple Europe flights from BOS to Birmingham(????) and Milan from JFK (with 4 competitors????) might be about it. I would like to see you guys do St. Louis to Newcastle, though. I think I have a great aunt who lives there, and there would probably be plenty of seats available....


Bye Bye---General Lee

 

[Dornier 335]

FI article

GULF CARRIERS' IMAGE UNDERGOES MAKEOVER

Once their biggest bugbears, legacy airlines are now embracing the Gulf?s mega-carriers. But some of these new world operators have local difficulties of their own to resolve

By: Max Kingsley-Jones

The acceleration of the Gulf?s global network carriers is moving into a higher gear as they forge links with old enemies. But each is tackling the next phase of their evolution in a different strategic direction, and there are some home-grown hub headaches to resolve to ensure their unabated growth continues.

With its fleet of over 200 aircraft, Emirates is the undisputed market leader. Last year it carried 39 million passengers through its Dubai hub and is growing its traffic rapidly as it deploys its expanding fleet of Airbus A380s across the network. Clear in its long-held view that life is better outside the global alliances, Emirates created a few waves when it linked up with Oneworld founder member and long-time British Airways collaborator, Qantas.

Qatar Airways, meanwhile, has broken ranks and joined the alliance throng, becoming a fully paid-up Oneworld member in October.

As chief executive James Hogan, Etihad has used its expanding ?equity alliance? as the cornerstone of a strategy to forge commercial tie-ups with airlines across the globe and across the alliance spectrum.

There are three key criteria that Hogan and his team examine when considering a strategic investment: do the networks match; would the deal bring ?scale or reorganisation opportunity?; and does the airline have a good management team in place.

The last point is important, as Hogan does not want Etihad?s own team distracted ? and this is what, he says, sets the Etihad strategy apart from the empire building of Swissair more than a decade ago.

?In the investments we look at, we put in management teams ? but they report to a board. We have representatives on the board, but those CEOs are responsible for their own day-to-day business,? he says. ?This is the big difference when people say Swissair tried this. Swissair took management control.?

?Scale? is a word Hogan repeats often, pointing out that Etihad and its equity partners operate a combined fleet of 500 aircraft, and this also helps with buying power: ?We?re achieving considerable group deals, which is the important flip-side of this equity strategy: to build scale and improve unit cost,? he says.

Oman Air is ploughing its own furrow, currently independently of the alliances, but is accumulating a series of bilateral tie-ups. Although its ambitions are modest in relation to its near neighbours, the carrier does have significant near-term expansion planned.

The Emirates/Qantas love-in was instigated by the Dubai carrier?s president, Tim Clark, who says he had been watching how Qantas chief executive Alan Joyce was reshaping the carrier, and saw an opportunity that could work for both sides. ?For Qantas, its international [division] was the weak link in Alan?s whole business model. So I thought that it was probably a good idea to have a chat, and Alan picked it up and ran with it so fast,? Clark says.

The commercial agreement came off the chocks in April, with Qantas switching its Australia-London ?Kangaroo route? stop-over from Singapore to Dubai. This allows it to connect on to the Emirates network, while its partner gets access to its new partner's Australian network at the end of its flights from Dubai.

?Is it working for us? Yes. We?ve seen growth in all our segments year-on-year pre-Qantas/post-Qantas, so it?s actually quite a good story. I hope it works for them,? Clark says. "If our numbers are right for our estimation of what Alan?s doing with his [business], then I think it probably is working quite well for Qantas. It?s never going to be easy ? it never was easy.?


MAJOR TRANSFORMATION

Even by the standards of fast-moving Qatar Airways, the next 12 months represents a major transformation for its operations. ?2014 will be very exciting for Qatar Airways because we will be part of Oneworld, we will receive our first A380s and first A350s, and will move to our new home ? Hamad International airport (HIA),? says chief executive Akbar Al Baker. ?Joining Oneworld will be very important for us. We will have a reach to over 860 destinations and over 550 lounges. It will give us a boost to our revenue and to our Oneworld partners. It will give Oneworld members a double-digit boost to their network in Africa and the Middle East.?

He adds: ?The reason we are so excited about Oneworld is that it is the only one of three alliances that does not interfere with your network development or who you codeshare with.?

At Oman Air the focus is on bilateral relationships, rather than joining an alliance, says chief executive Wayne Pearce. The airline has implemented or announced codeshares with five carriers, including both independent players and alliance members. They include Emirates, Oneworld members Malaysia Airlines, Qatar Airways and Royal Jordanian, and Star?s Ethiopian Airlines. ?We?ll announce another four or five by end of the year, and we?re in talks with a number of others,? says Pearce.

?So we?re building up a whole lot of bilaterals, but we haven?t joined an alliance. We talk to the principal people [in the alliances], but at the moment we?re focused on the bilaterals. But you never say ?I?ll never do anything?,? he adds.

Emirates? Clark says ?a big shift? has been playing out in the relationship between the Gulf carriers and the legacy airlines, many of which were founder members of the alliances in the 1990s.

?I?ve been banging that drum for a long time about the Jurassic thinking of the alliances,? he says. ?What has happened is a kind of realisation that: one, the Gulf airlines are here to stay; two, they?re actually not doing a bad job; and three, their redefinition of the way this can work, etc, means perhaps the airlines should be dealing a bit more with them, rather than going through the exclusion scenarios, which are possibly more damaging than inclusive scenarios.?

As he surveys Emirates? next move, Clark is not yet ready to implement long-held plans to create ?a fully linked global carrier? operating services between points outside Dubai: ?We have the aero-political rights from points in Asia and from the USA to do it. Is the timing right? Probably not.?

He acknowledges that such a move would not sit well with rivals, and has already suffered a backlash in Italy over the introduction of services between Milan and New York: ?I thought this would be a relatively easy aero-political exercise ? two relatively underserved cities, and the Italians asked us to do it.

"Alitalia took us to court, but we?re just doing what we were asked to do.?

 

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QANTAS TIE-UP

Flush with the success of its Qantas tie-up, Clark is conscious that Emirates can benefit from working with competitors, “but if you start taking them down in their back yard, it’s difficult”, he says.

Qatar Airways is focused on expanding across its already expansive network, which now covers the six continents. “We still see gaps which Qatar Airways will be able to fulfil,” says Al Baker.

The decision to launch Philadelphia services was inspired by its alliance membership, as this is a hub of US Airways, which is Oneworld-bound if the American merger comes off.

Qatar is also branching out locally with a wholly-owned Saudi Arabian domestic airline which should be ready for launch by early 2015, initially flying Airbus single-aisle aircraft acquired via its parent, says Al Baker. The airline will be “a 100% Qatari-owned company” run by senior management recruited from outside Qatar Airways.
Oman Air is tempering its expansion plans around its role as a national airline, rather than a predominantly hub-and-spoke operation like its bigger neighbours. “We are a network carrier, but we’re not trying to get to 100 aircraft in three years’ time,” says Pearce.

“We have 30 aircraft and 20 more on order. We have a roll-out of older aircraft, so that will take us to a net total of 44 aircraft by 2018. But we have a major fleet programme review under way and we are aiming to expand the fleet to 50 aircraft by 2017, with further growth beyond that to 2022,”

Pearce is working to turn around the losses at Oman Air, but is convinced that the airline needs to expand to be profitable. “We certainly wound our losses down in 2012, but we’ve got a long way to go – we need a bigger fleet and continue to make efficiencies and get our seat factors and yield up,” he says.

Etihad meanwhile carried 10 million passengers in 2012, but Hogan is guarded on any growth forecast for this year. “We brought in 15 aircraft last year, so we’ve seen growth in passengers, ASKs, cargo ATKs and revenue,” he says. “What’s important is we’re getting the load factor and the RASK that we’re targeting.”

Etihad currently serves 94 cities with a fleet of 80 aircraft, including freighters, and is looking to add destinations in “all parts of the world”, says Hogan. “We’ve just gone into Latin America [Sao Paulo]. There will be more flying announced shortly into the USA and more European flying. We’re building frequency in Southeast Asia and into China and into India,” he says.


And after steering the carrier to a first, albeit small, profit in 2011, Hogan is confident Etihad Airways will remain in the black for a third successive year: “And it will be better than last year,” he says. Net profit rose by 200% to $42 million last year (its fiscal year runs to the calendar year), while revenue was up 17% to $4.8 billion.




Emirates is adding more destinations within the “3,000-mile arena” from Dubai and upgauging to the A380 on existing points such as Barcelona, Brisbane and Los Angeles. It has more African points coming, including Guinea’s capital Conakry, Dakar and the reintroduction of Tripoli.

The Dubai carrier now serves seven points in the USA, says Clark, “and we’re always interested in more, but whenever we speak about that [Delta chief executive] Richard Anderson goes running to the state department saying ‘this is not fair’”.

Clark describes Emirates’ expansion as “a story of explosive growth”. The airline carried over 39 million passengers during its last fiscal year, and traffic is rising at up to 20% annually.

And this growth continues, he says.

“By the end of 2013 we will have opened 25 new points and taken on 40 additional aircraft,” although Clark adds that Emirates plans to only add a net four aircraft in 2014, as it will retire 14 A330/A340s and take delivery of 18 A380s and 777s.

Emirates’ growth and the strong recovery of Dubai as a trading and leisure destination is putting pressure on the current airport (DXB), despite an ongoing expansion programme designed to enable the airport handle more than 90 million passengers by 2020. Clark says that the airport is handling “62-63 million” passengers a year now and growing at 15%, which means it is very likely to surpass that 2020 traffic projection during 2016.

“By August 2016, at the current rate of growth DXB will be at 97 million passengers, of which Emirates will be about 45 million,” he says. “The maths tells us that compounded [we’ll reach the target] four years earlier than we thought we would. So Emirates is busy working on stand choreography in the peaks to maximise the most efficient use of the real estate.”
DUBAI'S NEW AIRPORT

The all-new airport south of the city, dubbed Dubai World Central (DWC), will take up the load to relieve the pressure on DXB by handling cargo flights and new entrants. “With some smart planning of the operation, we can take DXB up to about 100-105 million passengers. At the same time, DWC could grow to 15 million or so by 2020 within the existing terminal, so the SP [strategic plan] 2020 has an amalgam of the two fields, and we could get to 120 million,” says Clark.

He adds that with Abu Dhabi’s capacity set to rise from around 2017 with the opening of its mid-field terminal complex, “for a bit, it might take the heat” off Dubai’s airports.

The long-term solution for Dubai is “to build the big one at DWC”, says Clark, referring to the proposed six runway/160 million passenger complex (see box).

“I think the government will take that decision fairly soon,” he says, adding that this huge hub would eventually become home to Emirates “through a modular approach”.

Over in Doha, Qatar Airways has already squeezed every ounce out of the existing airport and is ready for its overdue move to all-new airport HIA next year. The transfer was delayed from 2013 due to late completion and contractual issues with the developer. Al Baker declines to specify when exactly the move will happen, saying that only that it will be “as soon as we have concluded all our issues with the contractors who are defaulting in delivering the airport to us”.

Its ongoing double-digit expansion saw Qatar Airways carry 17.2 million passengers in its last fiscal year (to March 2013), and this is expected to rise a further 13% to 19.5 million this year.

“The biggest challenge is not getting enough aircraft on time,” says Al Baker. “We have a fleet of 129 aircraft and are taking one every 12 days on average. We should have 200 aircraft in less than three years, maybe earlier.”

The new aircraft are all being used for growth, as plans to begin replacing older aircraft were affected by delivery delays. “We were supposed to [begin a roll-over] if Boeing had given us the aircraft on time. The roll-over will not begin for another two years, because we are so short of aircraft that A330s and A340s that were supposed to be phased out are going for a cabin refit,” says Al Baker.

 

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HIGH GROWTH

With such high growth rates and the delay in moving over to the new hub, Qatar Airways is rapidly outgrowing the current Doha airport, which only has remote stands.

“Next year, the current airport will be handling nearly 28 million passengers,” says Al Baker, who adds that this will match the capacity of the new hub on the day its doors open. “This is why we’ve already started working on the final phase, which will increase capacity to 48-50 million passengers and should be ready in 2016.”

HIA is a dual-runway hub development built on reclaimed land adjacent to the existing airport. It will have 41 contact gates, several of which will offer dual-deck air bridges for A380s.

This year Oman Air will grow 12%, carrying almost 5 million passengers – half of which will be origin and destination traffic. Future growth will be undertaken systematically, increasing frequency to existing routes, bringing better connectivity and adding new destinations, says Pearce.

“As the national airline of Oman we’re passionate about the country, so we really try to design it so that half our traffic goes in and out of Oman. And our goal is to keep that or even accelerate it," he adds.

The airline’s international network includes six European points (Frankfurt, London, Milan, Munich, Paris and Zurich) and two in Asia (Bangkok and Kuala Lumpur). It aims to establish daily frequencies on all its European services – today only London Heathrow has seven flights a week – and add more Asian points, with Manila and Jakarta at the top of the list. A second daily frequency to Heathrow is also being sought.

The Gulf carriers are undoubtedly now leaving their mark on every market around the world. If Dubai’s hub developments pan out as hoped, Clark talks about the potential for Emirates to double its A380 fleet to 180 aircraft. “Now that would send shockwaves through the airline community,” says Clark – someone who is never knowingly overstated.


GULF HUBS RACE TO KEEP PACE WITH GROWTH

Airport development in the Gulf is the backbone of the region’s network carriers' ambitions, so unsurprisingly each of their hubs have major expansion programmes.

Dubai International (DXB) is undergoing further growth, but despite extensive work this is probably only a stop-gap until the emirate’s mega-hub development, Dubai World Central (DWC) airport becomes fully operational. Down the road in Abu Dhabi, Etihad Airways will get its new mid-field terminal around four years from now.

 

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In Doha, Qatar Airways is poised to jump across to its all-new hub, Hamad International airport (HIA) in 2014. Work is well advanced to transform Muscat International airport in Oman, with the addition of a second runway and a completely new terminal complex. Bahrain is adopting a three-phase development which includes modernising Gulf Air’s existing hub at Manama, ahead of long-term construction of an all-new airport.


FIRST SERVICES

Dubai’s DWC reached a significant milestone in October with the launch of its first passenger flights, but the realisation of its long-term aspirations are still some way away.

The airport’s first scheduled passenger operator is Hungary’s budget airline Wizz Air. “We expect [other low-cost carriers] to follow,” says Paul Griffiths, chief executive of Dubai Airports.

DWC was hailed as the world’s biggest airport project – with six runways and a capacity of 160 million passengers. However, development has largely been on hold, with the city focusing on boosting capacity at its existing international airport. Griffiths expects the new gateway – also known as Al Maktoum International – to “play the dominant role” after 2020, by which time DXB will have reached its limit of almost 100 million passengers a year.

But as president Tim Clark explains, Emirates is concerned that expansion planned for DXB ahead of DWC becoming fully on line may not keep pace with its own requirements.

Emirates’ growth and the strong recovery of Dubai as a trading and leisure destination is putting pressure on the current airport despite an ongoing expansion programme designed to enable the airport handle more than 90 million passengers by 2020. Clark says that the airport is handling “62-63 million” passengers a year now and growing at 15%, which means it is very likely to surpass that 2020 traffic projection during 2016.

“By August 2016, at the current rate of growth DXB will be at 97 million passengers, of which Emirates will be about 45 million,” he says. “The maths tells us that compounded [we’ll reach the target] four years earlier than we thought we would. So Emirates is busy working on stand choreography in the peaks to maximise the most efficient use of the real estate.”

From 2017, Abu Dhabi’s giant Midfield Terminal will be the new hub of flag carrier Etihad Airways, with an initial capacity of 30 million passengers. The emirate’s 1970s-era international airport, with its two modest terminal buildings, has struggled to keep pace with the growth of Etihad and slot demand from other airlines. The airport catered for a record 14.7 million passengers in 2012, and Abu Dhabi Airports (ADAC) expects numbers to be nudging 20 million by the time the Midfield Terminal opens.

ADAC chief executive Tony Douglas is confident the new building, which will have 65 gates – including eight for the Airbus A380 – and is located between the airport’s two runways, will give the carrier the room it needs beyond 2030.

The Omani government describes the construction of the new Muscat International airport as the “largest infrastructure project undertaken in its history”. The development, on land adjacent to the existing Seeb airport, will have an initial capacity of 12 million passengers, rising in phases to 48 million. The current facility handled 7.5 million passengers last year – an increase of 17% on the previous year.

As part of the new airport’s construction, the existing runway will be extended to 4,000m (13,100ft), and a second runway of similar length is due to open in 2014. The airport, which is designed to accommodate Airbus A380-sized Code F aircraft, is due to open within five years.

Bahrain airport is confident that the worst is behind it, following the collapse of one local carrier and the downsizing of its hub operator Gulf Air, and is close to launching a $1 billion investment programme to boost the airport’s capacity.


BAHRAIN'S RECOVERY

In the wake of political upheaval in early 2011 Bahrain’s traffic declined, but rebounded in 2012 to 8.5 million passengers. The recent airline developments will see 2013 traffic fall to 7.5-8 million.

The kingdom’s political problems “have subdued to a large extent... life is back to normal in Bahrain”, says Bahrain Airport Company chief executive Mohamed Yousif Al-Binfalah.

There is a short-, medium- and long-term development plan for Bahrain’s airport infrastructure, starting with a $80 million upgrade over the next 2-3 years to the existing facilities. “In the next five years, the government plans to invest $1 billion to increase the capacity of the terminal to 13.5 million passengers,” Al-Binfalah says.

A long-term plan is to build a completely new airport, but construction is at least 15-20 years away, says Al-Binfalah. “The initial steps have been to identify two potential locations, both of which would be on reclaimed land,” he says.

 

[General Lee]

Wow, that's a lot of info. Looks like there are a lot of egos there in the Gulf, and a lot of money. Not many people want to visit the extreme heat, but those carriers want to connect people mainly from each corner of the Globe. Due to airport constraints at DXB, EK is trying to figure out what to do with their extra planes, and that could lead to some risky choices. FlyDubai also wants to expand there, and neither EK nor FlyDubai wants to go to the other airport, which looks like will be used mainly by cargo carriers and new entrants like Wizz Air.

Sounds like 3 big carriers plus a couple smaller ones (Gulf Air and Oman Air), all trying to do the same thing, connect people. That may hurt all of them if they all start competing on price.


Look at the last couple paragraphs from the article about Bahrain:

"There is a short-, medium- and long-term development plan for Bahrain?s airport infrastructure, starting with a $80 million upgrade over the next 2-3 years to the existing facilities. ?In the next five years, the government plans to invest $1 billion to increase the capacity of the terminal to 13.5 million passengers,? Al-Binfalah says.

A long-term plan is to build a completely new airport, but construction is at least 15-20 years away, says Al-Binfalah. ?The initial steps have been to identify two potential locations, both of which would be on reclaimed land,? he says."


Anyone see any problem with that? Sounds like they ALL want to be the big fish in the ME connecting pond..... It will be interesting to watch.


Bye Bye---General Lee

 

[johnsonrod]

I can't wait to fly on the SLC-Munich flight on an Emirates A380 in a few years!

 

[General Lee]

I can't wait to fly on the SLC-Munich flight on an Emirates A380 in a few years!

You've got it WRONG J-Rod. It'll be Ogden, UT to Munich on the A380. SLC to Munich will be on the Emirates Sonic Cruiser. Only the Gulf Carriers will be able to afford them too, for some reason...??


Bye Bye---General Lee

 

[Flopgut]

My next choice was UAL/Star Alliance. The UAL website showed that routing, but the prices were high.

Our pricing has to include all taxes and fees. Consider looking at the final cost of the Gulf carriers ticket and then look at what ours would be.

Something I do not understand, and if you care to comment or not, great. (Not really directed to you Cliff). CAL used to get twice the ticket price to Europe that we now charge as UAL. We used to sell out CAL and never allowed a mileage upgrade. UAL allows mileage upgrades and will also upgrade even the lowest fare tickets if they can. What is going on? I'm not saying CAL was necessarily the greatest service airline ever, but are we that bad now? Or is our mgt team just running us into the next bk?

 

[Flopgut]

The ball is rolling...you won't stop it.

You guys sound like the bank tellers when ATMs hit the street - kicking and screaming until no one cared, because the product is what the market wanted.

fv

Easy there buddy, you're not quite that revolutionary. This all just boils down to air transportation A to B and skilled labor. My neighbors in Houston, TX have spent decades in the oil patch, and not one of them says Emirates will sustain this momentum. Easy come, easy go.