Gulf airlines go for emerging not developed markets for expansion
Posted on 16 August 2011 with no comments from readers
The rising airlines of the Gulf States – Emirates, Etihad and Qatar Airways – have China, Brazil, Russia, India and Africa at the top of their priority lists for route expansion, and not the developed world that looks set for a long recession.
At the start of next year Emirates will extend its direct South American services, the only direct flights from the Gulf, to Rio de Janeiro and Buenos Aires as well as starting flights to Russia’s second largest city St Petersburg in November which no other Gulf carrier serves.
New Chinese destinations
By the year-end Etihad will add Chengdu as its 69th destination while Qatar Airways will commence flights to Chongqing, a metropolitan zone of 28 million souls practically unknown in the West.
Emirates also intends to start A380 services to other unfamiliar Chinese cities like Urumxi, Xiamen, Nanjing and Chengdu within its planning horizon. The continued expansion of the Chinese economy and its vast population clearly gives huge scope for new services while more traditional markets in the West look stuck with low or no growth economies.
Emirates already flies daily or twice-daily A380 superjumbo services into Beijing, Shanghai, Guangzhou and Hong Kong, and Qatar Airways offers the same destinations on smaller aircraft. Etihad currently serves Bejing, Shanghai and Hong Kong.
Incredible India
The proximity of India and the role of expatriates in the Gulf makes it a natural target for the Gulf airlines which each have extensive connections with the subcontinent, while Africa is also undergoing route expansion, partly to connect with flights from China whose commercial links with the dark continent have boomed in recent years.
How very different is the outlook for expansion into the emerging markets of the world for the Gulf airlines to the very restricted possibilities for growth in the home markets of many of the airlines from developed nations. And that comes in addition to the vast competitive advantages of cheaper staff and more modern aircraft like the A380.
Small wonder that when you talk to staff from rival Western airlines these days they are more often than not weighing up the prospects of a career switch to the Gulf carriers, though usually lamenting that salaries are not high enough.
