Home / World Business
Mon, Feb 27, 2006 - Page 12 News List

Gulf state airlines to challenge Asia's dominance


This file photo dated Nov. 22, 2005 shows people watching an Airbus A380, sporting the colors of air carrier Emirates, taking off during the Dubai Air Show.


When Peter Harbison flew back to Sydney after attending the Asian Aerospace exhibition here last week, his plane could offer only one entertainment channel in the first hour of the seven-hour flight.

It would have been different had Harbison, managing director of the Center for Asia Pacific Aviation, flown Middle East carrier Emirates.

"On Emirates I can chose from about 200 CDs," he said referring to the international airline of the United Arab Emirates (UAE).

Harbison's anecdote has more serious undertones -- Asia-Pacific airlines face increasing competition from Gulf carriers including Emirates, Qatar Airways, Gulf Air and Abu Dhabi's Etihad Airways.

As Gulf carriers raise the bar of inflight service and beef up their fleets with newer and bigger aircraft that can fly longer distances, the center of gravity in the aviation industry could shift from Asia to the Middle East, analysts said.

State-of-the-art airports are being constructed in Dubai, Abu Dhabi, Doha and Jeddah to support their respective carriers' lofty ambitions as well as their own plans to become aviation hubs.

"Many major Asia-Pacific airlines may be reluctant to publicly address the potential threat posed by the spectacular growth and undoubted expansionist ambitions of airlines from the Gulf states, but it cannot be ignored," said industry analyst Tom Ballantyne in a recently published commentary.

Gulf carriers will become major competitors on Asia-Pacific airlines' key long-and medium-haul routes, said Ballantyne, chief correspondent of Orient Aviation magazine.

With long-range aircraft, the oil-rich Gulf states and their respective airlines are gaining share in the growing intercontinental traffic between Asia and Europe, and the US.

For example, Dubai's airport handled only 5 million passengers in 1991 but the numbers soared by 400 percent to 25 million last year, said aviation consultant Harbison.

In the same period, passenger traffic at Singapore's Changi Airport -- a Southeast Asian hub -- climbed from 16 million passengers to 32 million, or 100 percent.

While more passengers passed through Changi, Dubai had a much faster growth rate, Harbison said, adding that parity was still "some years off."

The rise of Gulf carriers could "shift the balance of power very much to the Middle East for long-haul connections," Harbison said.

As the Gulf carriers increase their market size, they are also able to dictate pricing and behavior of other airlines, which would be forced to match the quality of inflight services and aircraft fleet.

Harbison said passengers' expectations are now pushed higher, with Gulf carriers "in effect driving how the industry works."

Like its competitors in the Gulf, Qatar Airways has embarked on an aggressive buildup. By 2015, it hopes to have a fleet of 110 aircraft.

The airline has ordered four double-decker A380 "superjumbo" jets from European manufacturer Airbus and 60 new generation A350s. It is in talks with both Airbus and US rival Boeing for 20 more wide-body planes.

By 2010 or 2011, Qatar Airways expects to be flying to between 100 and 115 destinations worldwide from 69 currently.

Harbison said Asian carriers must meet the challenge by cutting costs and further liberalizing their markets.

"That means going beyond what they have already done ... to have more effective partnerships because these carriers in the Middle East are going to get so big that individual airlines in Asia would not be able to compete," he said.

This story has been viewed 4064 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top