Gulf Carriers Internal Competition
#1
Banned
Thread Starter
Joined APC: Jul 2010
Position: 737 NG CAPT.
Posts: 216
Gulf Carriers Internal Competition
It seems the Gulf Airlines are possibly at risk of trying to out compete each other and growing at unsustainable and unprecedented growth rates. I think their new aircraft and great service speak for themselves but is it sustainable with them directly competing amongst themselves? Etihad is upping the ante in the push into Europe with buying a 30% stake in Air Berlin. Emirates has tried for years to increase their growth in Berlin. Qatar is looking an new European options and owns a large stake in Cargolux. Growth in North America is being stalled by the Canadians as Air Canada doesn't want to risk more loss of market share. There are a bunch of A-380s bound for new US destinations from Emirates. All of this seems like a glass house ready to shatter if there is another economic disaster or oil situation like Iran and the Strait of Hormuz.
Are the Gulf's big carriers at risk of growing too fast? | Gulf Tourism and Aviation | AMEinfo.com
Are the Gulf's big carriers at risk of growing too fast? | Gulf Tourism and Aviation | AMEinfo.com
#2
Gets Weekends Off
Joined APC: Aug 2005
Position: tri current
Posts: 1,485
Emirates grows because the market demand is there. The airline keeps filling airplanes up with passengers and cargo and remains profitable while it grows. Etihad and Qatar are "ego" airlines created by their respective governments that attempt to emulate the success of Emirates and are not yet profitable. Their growth rates are very fast and there isn't much need for them to be profitable because of the deep pockets of their sponsor governments. Ego is the main driver for their creation and continuation.
Etihad definitely takes revenue away from Emirates in two forms. One is they take passengers away who's previous choice would have been Emirates. Two is they take some of the route rights that are granted to the UAE as a country. Since their creation they have obtained half of any new route rights awarded to the UAE.
Competition is always healthy, but you're likely correct in saying that the current pace of growth for all three airlines is not sustainable. One of the major issues though is airspace and airport constraints. The respective home airports of these carriers are having a very difficult time keeping up with the growth. Extended holding delays on arrival and departure are not uncommon. They've all responded with airport improvements and/or new airport construction. That helps the ground portion, but the airspace issues ramain. Projects are underway to redesign the airspace in the Gulf, but it's a political minefield and with a combative Iran ( who blocked one of the best routes out of Dubai up to Europe a few years back ) it makes the process that much more difficult.
That all said. One of the major reasons for the success of the Gulf carriers is that they serve emerging markets with almost geographically perfect hubs. India, China, Eastern Europe, and Africa are all developing markets that have very high growth rates for international air travel. The carriers of those countries do not adequately serve the needs of their population. The Gulf carriers are able to take someone from Beijing to Lagos, for example, far more efficiently than any other carrier. Same holds true for a great number of city pairs from western Europe and even from North America.
I really don't have a crystal ball to predict the future, but so far they've done far better than I thought they would. When I joined Emirates the plan was for a 100 aircraft fleet at some point in the future. Well, it's well past that now. The plan changed because the demand was there for a larger fleet. As long as the demand remains the growth will continue.
Typhoonpilot
Etihad definitely takes revenue away from Emirates in two forms. One is they take passengers away who's previous choice would have been Emirates. Two is they take some of the route rights that are granted to the UAE as a country. Since their creation they have obtained half of any new route rights awarded to the UAE.
Competition is always healthy, but you're likely correct in saying that the current pace of growth for all three airlines is not sustainable. One of the major issues though is airspace and airport constraints. The respective home airports of these carriers are having a very difficult time keeping up with the growth. Extended holding delays on arrival and departure are not uncommon. They've all responded with airport improvements and/or new airport construction. That helps the ground portion, but the airspace issues ramain. Projects are underway to redesign the airspace in the Gulf, but it's a political minefield and with a combative Iran ( who blocked one of the best routes out of Dubai up to Europe a few years back ) it makes the process that much more difficult.
That all said. One of the major reasons for the success of the Gulf carriers is that they serve emerging markets with almost geographically perfect hubs. India, China, Eastern Europe, and Africa are all developing markets that have very high growth rates for international air travel. The carriers of those countries do not adequately serve the needs of their population. The Gulf carriers are able to take someone from Beijing to Lagos, for example, far more efficiently than any other carrier. Same holds true for a great number of city pairs from western Europe and even from North America.
I really don't have a crystal ball to predict the future, but so far they've done far better than I thought they would. When I joined Emirates the plan was for a 100 aircraft fleet at some point in the future. Well, it's well past that now. The plan changed because the demand was there for a larger fleet. As long as the demand remains the growth will continue.
Typhoonpilot
#3
Gets Weekends Off
Joined APC: Dec 2010
Posts: 3,090
With the future of aviation going to direct, point-to-point, operations, it should be interesting to see what happens when all of the gulf airlines get bypassed with direct flights such as PEK<->LOS once markets such as those further emerge.
#5
Gets Weekends Off
Joined APC: Oct 2008
Position: B757/767
Posts: 130
This is a good point. With the B-787 and A350's coming, the geographical advantage that the gulf carriers currently enjoy could be significantly impacted.
#6
Gets Weekends Off
Joined APC: Aug 2005
Position: tri current
Posts: 1,485
Beijing - Lagos ??
There might be more of a market for CAN - LOS, that's Guangzhou - Lagos
This is a good point. With the B-787 and A350's coming, the geographical advantage that the gulf carriers currently enjoy could be significantly impacted.
The B787, while a great airplane, is too small to make any difference in a lot of markets. The A350 is nothing more than a 777-200ER/LR competitor.
Airport slot restictions and airspace restrictions in many locations worldwide make bigger airplanes more viable over the long run.
There will still be a need for a hub and spoke system on a lot of routes.
Typhoonpilot
#7
All of this seems like a glass house ready to shatter if there is another economic disaster or oil situation like Iran and the Strait of Hormuz.
Are the Gulf's big carriers at risk of growing too fast? | Gulf Tourism and Aviation | AMEinfo.com
Are the Gulf's big carriers at risk of growing too fast? | Gulf Tourism and Aviation | AMEinfo.com
#8
Banned
Thread Starter
Joined APC: Jul 2010
Position: 737 NG CAPT.
Posts: 216
Sorry to resurrect an old thread but an interesting topic. Here is some new discussion about the growth of the Big 3 Gulf Carriers and their ability to continue to grow and expand at such an unprecedented rate. I like James Hogan's reply the Etihad Ceo “We’re filling a gap in the market,” he said. Will that gap be big enough for all three big Gulf carriers (and perhaps Ethiopian too)? Time will tell.
Here is the link:
Can Abu Dhabi, Dubai and Doha all be thriving global hubs? | AirKarp
Here is the link:
Can Abu Dhabi, Dubai and Doha all be thriving global hubs? | AirKarp
#9
Don't forget Turkish who in some respects is better situated geographically than the Gulf carriers. Additionally, they have more "open" airspace to work within, and are building a new airport for the anticipated growth of the airline. I have always said it about US carriers, but may hold true abroad as well; every airline gets its decade. Perhaps the 2020s will be the Turkish decade while the others fight over airspace in the region.
#10
Gets Weekends Off
Joined APC: Jul 2008
Posts: 4,921
Emirates grows because the market demand is there. The airline keeps filling airplanes up with passengers and cargo and remains profitable while it grows. Etihad and Qatar are "ego" airlines created by their respective governments that attempt to emulate the success of Emirates and are not yet profitable. Their growth rates are very fast and there isn't much need for them to be profitable because of the deep pockets of their sponsor governments. Ego is the main driver for their creation and continuation.
Etihad definitely takes revenue away from Emirates in two forms. One is they take passengers away who's previous choice would have been Emirates. Two is they take some of the route rights that are granted to the UAE as a country. Since their creation they have obtained half of any new route rights awarded to the UAE.
Competition is always healthy, but you're likely correct in saying that the current pace of growth for all three airlines is not sustainable. One of the major issues though is airspace and airport constraints. The respective home airports of these carriers are having a very difficult time keeping up with the growth. Extended holding delays on arrival and departure are not uncommon. They've all responded with airport improvements and/or new airport construction. That helps the ground portion, but the airspace issues ramain. Projects are underway to redesign the airspace in the Gulf, but it's a political minefield and with a combative Iran ( who blocked one of the best routes out of Dubai up to Europe a few years back ) it makes the process that much more difficult.
That all said. One of the major reasons for the success of the Gulf carriers is that they serve emerging markets with almost geographically perfect hubs. India, China, Eastern Europe, and Africa are all developing markets that have very high growth rates for international air travel. The carriers of those countries do not adequately serve the needs of their population. The Gulf carriers are able to take someone from Beijing to Lagos, for example, far more efficiently than any other carrier. Same holds true for a great number of city pairs from western Europe and even from North America.
I really don't have a crystal ball to predict the future, but so far they've done far better than I thought they would. When I joined Emirates the plan was for a 100 aircraft fleet at some point in the future. Well, it's well past that now. The plan changed because the demand was there for a larger fleet. As long as the demand remains the growth will continue.
Typhoonpilot
Etihad definitely takes revenue away from Emirates in two forms. One is they take passengers away who's previous choice would have been Emirates. Two is they take some of the route rights that are granted to the UAE as a country. Since their creation they have obtained half of any new route rights awarded to the UAE.
Competition is always healthy, but you're likely correct in saying that the current pace of growth for all three airlines is not sustainable. One of the major issues though is airspace and airport constraints. The respective home airports of these carriers are having a very difficult time keeping up with the growth. Extended holding delays on arrival and departure are not uncommon. They've all responded with airport improvements and/or new airport construction. That helps the ground portion, but the airspace issues ramain. Projects are underway to redesign the airspace in the Gulf, but it's a political minefield and with a combative Iran ( who blocked one of the best routes out of Dubai up to Europe a few years back ) it makes the process that much more difficult.
That all said. One of the major reasons for the success of the Gulf carriers is that they serve emerging markets with almost geographically perfect hubs. India, China, Eastern Europe, and Africa are all developing markets that have very high growth rates for international air travel. The carriers of those countries do not adequately serve the needs of their population. The Gulf carriers are able to take someone from Beijing to Lagos, for example, far more efficiently than any other carrier. Same holds true for a great number of city pairs from western Europe and even from North America.
I really don't have a crystal ball to predict the future, but so far they've done far better than I thought they would. When I joined Emirates the plan was for a 100 aircraft fleet at some point in the future. Well, it's well past that now. The plan changed because the demand was there for a larger fleet. As long as the demand remains the growth will continue.
Typhoonpilot
Thread
Thread Starter
Forum
Replies
Last Post