Arabian Gulf carriers are here to stay and their western counterparts will do well to join hands with them, Tony Tyler, the International Air Transport Association (Iata) chief said yesterday.
The director general of the Iata said that the sometimes frosty relationship between European and Gulf carriers is starting to thaw and called on governments to take a stronger line on consolidation in the industry.
"I think this argument about Gulf carriers' hubs versus the traditional hubs in Europe and North America has been going on for years. It's a bit of a stay-on argument, but with Qatar Airways joining oneworld and Etihad doing codeshares and joined ventures with Air France, we have seen definitely some changes in the approach," said Mr Tyler.
“The Gulf carriers are not going to go away. Other airlines need to think of a response to that. The response that is clearly been taken is if they are going to be here, then let’s work with them.”
Gulf carriers including Emirates Airline and Etihad Airways are adding European routes amid rising competition between carriers from the region and beyond. At the same time, emerging aviation hubs such as Dubai, Doha and Abu Dhabi are picking up increasing market share at the expense of more established European hubs, including London Heathrow and Paris Charles de Gaulle.
Mr Tyler added that Gulf carriers are following the successful model of developing hubs at their airports.
“I think it’s important to remember that most large carriers in the world today have grown large by developing hubs. If you look at the big European carriers, they are hub players and they grow traffic from A to C over point B,” said Mr Tyler.
“That’s what the Gulf carriers are doing. They are doing that at a scale that has not been seen before. They are using the geographical advantage of this region, linked with the technological improvements – basically very long-haul non-stop flights.”
However, he said that consolidation in the aviation industry is still hindered, as some governments are protective of their carriers. Also, a majority ownership of a national carrier by a foreign airline can subject the former to lose its traffic rights.
“This is a huge obstacle to rational business consolidation in this industry,” said Mr Tyler.
“Every gathering of aviation people from around the world, we see people saying that this is nonsense. But we see no real movements at all from governments in this direction.”
Alternatively, Etihad has been acquiring minority stakes in national and private carriers from around the world. Under its strategy it has taken stakes in a number of struggling airlines, including Aer Lingus, airberlin, Air Serbia, Air Seychelles, Virgin Australia, Jet Airways and Etihad Regional, formerly known as Darwin Airline.
“Etihad strategy is through building up its network and its reach. That’s a strategy that takes a little bit of capital and not all airlines will have access to that sort of capital,” said Mr Tyler.
“It’s clear your strategy is designed to pay off in the long term, but not necessary pay off in the short term, because generally speaking an airline will want your capital if it doesn’t have its own already.”
selgazzar@thenational.ae
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