The good news...so to speak
Gulf carriers winning battle for passengers with innovative service offerings and newer aircraft
NOT SINCE THE WEEK before the Battle of Britain has aviation faced such ominous adversity as it does now. However, this time the issue at hand isn’t the defence of a country but the threatening domination of aviation worldwide by carriers situated in the Gulf States. Since 1985 aviation in the Gulf has grown by intercontinental-sized leaps and bounds. The three major airlines based in the region – Emirates, Etihad and Qatar – are flying directly to more international destinations than all the airlines in Africa and South America combined.
These airlines’ late entry into the business meant they had an advantage over legacy carriers that had been around for decades. That advantage – primarily modern fleets – meant the Gulf carriers initially had aircraft that were more fuel efficient and could therefore offer a newer, arguably better, offering at lower prices than their existing, long-established competitors.
Building on that initial success the three carriers over varying numbers of years developed their respective bases of operations into significant and efficient hubs for airline traffic. They’re now stronger and meaner and hungrier than before. And the pressure they’re putting on legacy carriers is creating a real headache for airlines, governments and aviation bodies worldwide.
Countries such as Canada have already started imposing strict measures to limit the influence of Gulf carriers, including granting them just three landing slots daily. Other countries are imposing everincreasing landing fees and taxes on foreign carriers, which then simply get their own governments to respond in kind.
But most countries – including South Africa – are more liberal. For now.
Christian Klick, corporate affairs vicepresident at Star Alliance, the world’s largest alliance of airlines, says the issue is about capacity growth versus demand growth. “South Africa’s tourism traffic grew last year by around 16%. Yet capacity growth from all airlines to SA grew by 60% or thereabouts. That should be a cause for concern.”
Klick has a point. SA Airways used to fly between Cape Town and Frankfurt but closed that route when it was no longer sustainable. Today Emirates flies two daily flights from Cape Town to Frankfurt.
“Can a country like SA really afford to lose flights from key areas like Cape Town? I think not. Flooding a market unfortunately can lead to this very thing happening,” Klick says.
One way that carriers began fighting the Gulf threat was by joining and creating alliances. What those alliances do is help their affiliated carriers work together to provide more options and a better product offering to passengers. Currently 29 of the world’s biggest airlines – including SAA – belong to Star Alliance, and 16 airlines – including Air France/KLM and Delta – belong to the Skyteam alliance. The third major alliance – Oneworld – involves 12 airlines, including the likes of British Airways and Cathay Pacific.
None of the big Gulf carriers belong to an alliance.
Lufthansa board member Kay Kratky says the Gulf carriers have changed the competition dramatically over the past few years. “The main way we’re dealing with it is with an increased focus on product. We look at what our customers are asking for and give it to them.” Kratky says an added advantage to a legacy carrier is experience. “We have more than 50 years of it. Along with experience go relationships that have been developed and built over the years.”
Kratky says now it’s not all about price of air tickets. “It’s more about value for money.” Lufthansa is introducing up to 35 new aircraft into service each year to ensure the average age of its fleet remains