Gulf airlines face challenges

A massive infrastructure boom at airports in Dubai, Abu Dhabi and Doha will create capacity for more than 300 million passengers a year in 2017.

By Ivan Gale,

Dubai: There are 16.7 million reasons why Emirates continues to rise among the ranks of international air carriers.

One of them is Marcos Herrmann. A vice-president of a Brazilian paint and timber company, Herrmann used to fly to Vietnam, where he has clients, via Frankfurt on Lufthansa. But with Emirates now flying to Sao Paulo, he can cut his travel time by several hours by going through Dubai.

Providing better connections on newer aircraft and offering high standards of service, Gulf airlines have been the most prominent success story in the post-9/11 airline industry. Experts are, however, quick to point out the challenges. Among them: a lack of slots at major air hubs worldwide, the slow pace of liberalisation in some countries, and new long-range aircraft that can bypass the Gulf hubs.

Richard Aboulafia, an aviation analyst at the Teal Group, attributes Gulf airlines' success to the trailblazing of Singapore Airlines, which years earlier began with a small local population but developed itself as a transit hub between long-haul routes. "Emirates is basically following Singapore. Etihad is following Emirates, and Qatar is following those guys," says Aboulafia.

All three have leveraged their unique geographical location. But they can only succeed if they continue to receive slots at major air hubs and governments continue to grant traffic rights.

James Hogan, CEO of Etihad Airways, says this year his airline has seen "exceptional growth" on long-haul routes to Australia, the UK and Canada. But it cannot add more frequencies without obtaining approval first from foreign governments. "It's a bilateral issue," he adds.

A massive infrastructure boom at airports in Dubai, Abu Dhabi and Doha will create capacity for more than 300 million passengers a year in 2017, according to the International Air Transport Association (IATA). But these gleaming new terminals could remain empty if Gulf airlines aren't allowed to fly to all of their planned routes.

Foreign governments sometimes protect their home carriers by limiting access by foreign carriers. In the last year, both Australia and Germany reportedly considered blocking more flights from Emirates.

"The UAE is very liberalised, but we will need to see further liberalisation in other markets," says Brian Pearce, chief economist at IATA. Etihad, for example, says it wants more air rights to India, Saudi Arabia and Egypt.

Accommodation

Then there is the issue of receiving slots at major airports. Many hubs in Europe are full and cannot accommodate new airlines. "At Paris, the issue is slots," says Etihad's Hogan.

"These challenges we face in Europe will affect the ambitions of Middle East airlines to serve the Europe-to-Asia market," says IATA spokesman Lorne Riley.

But perhaps the greatest wildcard is the effect of new aircraft technologies, and how Asian and European rivals will use them.

Ali Al Rais, general commercial manager at Qatar Airways, called the new generation aircraft from Airbus and Boeing a "double-edged sword." Flying up to 19 hours and 17,500 kilometres, the Boeing 777-200 LR represents how Gulf airlines now have unprecedented access to faraway destinations. But the same goes for their competitors. With new energy-sipping planes, airlines are now considering point-to-point routes that fly over the Gulf that were until now unprofitable. Gulf carriers currently offer the shortest routes between many European and Australasian cities. As aircraft becomes more sophisticated, the advantage of a Dubai stopover may lose its lustre. "The ground is shifting from Europe to the Middle East and Asia, and this is no surprise to industry followers," Al Rais said. "But new long range aircraft can now bypass Middle East hubs, if we are not ready with our infrastructure."

Thanks to an open skies agreement between the US and EU, airlines are looking to set up point-to-point services from secondary or other cities that haven't been flown in the past, says Pearce of the IATA. "That is due to new liberalised environments but also new technology in the aircraft," he said.

One day, travellers like Marcos Hermann may be able to fly from Sao Paulo to Ho Chi Minh City directly. No one is projecting a major slowdown for Gulf carriers. But in the $450 billion airline industry, they can be sure no one will make it easy for them.

Boeing Helps Condor Streamline Its Maintenance Operations

MILAN, Italy, - Condor has adopted Boeing's Web-based maintenance solution, Maintenance Performance Toolbox (Toolbox), to help improve the maintenance of its fleet of 22 757 and 767s.

Condor will use Toolbox modules Library and Authoring. These modules will help the airline streamline an array of maintenance activities including managing technical publications and training and customizing online maintenance manuals.

"Boeing's Toolbox is ideal for us. With the introduction of this latest maintenance technology we are going to be able now to distribute the necessary maintenance information to all technicians involved worldwide, just with a mouse click," said Klaus Reymer, technical director at Condor. "This will enhance our already lean processes one additional step forward."

The innovative suite of aircraft maintenance software solutions is the industry's first set of productivity tools designed to unify an airline's maintenance and engineering operations from start to finish.

"Maintenance Performance Toolbox is one of the key Boeing solutions to help airlines manage critical maintenance tasks," said Dan da Silva, vice president of Sales and Marketing for Boeing Commercial Aviation Services. "We're happy that Condor has endorsed Boeing as a partner to help it manage complex maintenance practices in a competitive environment that demands efficiency and first-rate service."

Accessible via an Internet browser as a secured, hosted service, Toolbox is a key component within Boeing's evolving portfolio of performance-enhancing solutions for aircraft maintenance. Boeing will provide reliable access to the Toolbox tools for Condor through its secure Internet portal, MyBoeingFleet. Only an Internet connection, password and computer - a laptop, desktop or pen tablet - are necessary to access the system.

Boeing, Thomsonfly.com Establish Partnership to Reduce Cost and Delivery Time for Spare Parts

MILAN, Italy, - Boeing and Thomsonfly.com, the UK-based carrier of TUI Travel PLC, today said they have signed an agreement in which the airline will become part of Boeing's Component Services Program (CSP). The program is a parts-provisioning effort that significantly reduces an airline's up-front investment in spare parts and offers a quick and reliable supply of critical parts from a pool shared by 30 participating operators.

"The Component Services Programs are one of the key Boeing solutions to help airlines manage critical spares operations," said Dan da Silva, vice president of Sales and Marketing for Boeing Commercial Aviation Services. "Thomsonfly.com has endorsed Boeing as a partner to help it manage complex spares operations in a competitive environment that demands efficiency and first-rate service."

The agreement applies to Thomsonfly.com's Next-Generation 737 fleet. The Component Services Program will allow Thomsonfly.com to outsource the cost and logistical trouble of keeping important parts on hand. By doing so, CSP helps reduce inventory and component repair and administration costs. Under the CSP, Boeing commits to providing parts covered under the agreement within 24 hours of a request.

"We are looking forward to Boeing being our reliable partner to ensure on-time performance." said Ian Ludlow, technical director of Thomsonfly.com.

Thomsonfly.com has signed up for a long-term commitment on the CSP, paying a rate that covers a potential exchange of more than 475 LRUs, or line replaceable units. LRUs are typically high-value items such as avionics boxes and precision mechanical assemblies, which are time-consuming and costly for an airline to repair and keep in inventory. Thomsonfly.com becomes the 30th airline in the CSP program.

Indian cabinet considers second airport for Delhi

India’s cabinet is considering a plan from the Uttar Pradesh state government to build a second international airport for Delhi at Greater Noida.

The plan has attracted opposition from GMR, which operates Delhi International Airport, because the proposed site for the Uttar Pradesh facility is only 72km away. “The GMR group has been protesting against this move, but all global cities have more than one airport and there’s no reason why Delhi shouldn’t,” says a senior official within the Indian aviation ministry.

Delhi International Airport claims its development plan is sufficient to meet Delhi’s needs for the next 20 years.

Geneva introduces baggage trolley charges

Geneva International is introducing a deposit scheme for its 1,700 baggage trolleys to dissuade passengers from removing them from the airport.

From next Tuesday, passengers will have to pay two Swiss Francs or two Euros (roughly US$1.70) to release the trolleys, say airport officials. The deposit is reclaimed when the trolleys are returned to collection points.

“We find them abandoned all over the place, even if we ultimately lose only a dozen per year,” says airport spokesman Philippe Roy.