Middle East is new global travel crossroads
DUBAI: It’s 1 a.m. and the sprawling airport in this desert city is bustling. Enough languages fill the air to make a United Nations translator’s head spin.
Thousands of fliers arrive every hour from China, Australia, India and nearly everywhere else on the planet. Few venture outside the terminal, which spans the length of 24 football fields. They come instead to catch connecting flights to somewhere else.
If it weren’t for three ambitious and rapidly expanding government-owned airlines — Emirates Airline, Etihad Airways and Qatar Airways — they might have never come to the Middle East.
For generations, international fliers have stopped over in London, Paris and Amsterdam. Now, they increasingly switch planes in Dubai, Doha and Abu Dhabi, making this region the new crossroads of global travel. The switch is driven by both the airports and airlines, all backed by governments that see aviation as the way to make their countries bigger players in the global economy.
Passengers are won over by their fancy new planes and top-notch service. But the real key to the airlines’ incredible growth is geography.
Their hubs in Qatar and the United Arab Emirates are an eight-hour flight away from two-thirds of the world’s population, including a growing middle class in India, China and Southeast Asia that is eager to travel.
In the past five years, the annual number of passengers traveling through Dubai International Airport — home to Emirates — has jumped from 28.8 million to 51 million, a 77 per cent increase. The airport now sees more passengers than New York’s John F. Kennedy International Airport.
"Everybody accepts that the balance of global economic power is shifting to the east. The geographic position of the Gulf hubs makes them much more relevant today," says Willie Walsh, CEO of International Airlines Group, the parent company of British Airways and Iberia.
Persian Gulf carriers are already chipping away at some US and European airlines’ most lucrative business: long-haul international flights. But it’s what’s ahead that really has other airlines worried.
Gulf carriers hold one-third of the orders for the Boeing 777 and Airbus A380 — two of the world’s largest and farthest-flying jets. That’s enough planes to put 70,000 passengers in the air at any given moment.
"They’re being very aggressive," says Adam Weissenberg, who heads the travel and hospitality consulting group at Deloitte. "These airlines are not going away."
Modern day air routes can be traced to the post-World War II era when airlines such as Pan Am and British Airways built the first global networks. Flights from New York would cross the Atlantic, stop in Europe’s capital cities to refuel and then head on to Africa, India and eventually Asia. Two generations later, those routes mostly remain.
The Gulf carriers are trying to change that. And they have a lot going for them.
Their hubs are in warm climates with little air-travel congestion and cheap, non-union workers. That means runways never shut down because of snow, planes don’t circle waiting for their turn to land and flights aren’t canceled by labor strikes as they often are in Europe.
"These guys are making the connection as seamless as possible," says John Thomas of L.E.K. Consulting.
Top-paying passengers are given over-the-top service that bolsters the airlines’ reputations. On some Emirates planes, first-class passengers get private suites with doors, a 23-inch television, minibar and a phone to call flight attendants. If that’s not enough, a "Do Not Disturb" sign can be switched on.
There are spa-like restrooms with heated floors and a shower. But what really makes these Persian Gulf airlines unique is their focus on direct flights to smaller cities.
The hub system they are developing is similar to what US airlines did a generation ago, which allowed passengers to fly from, say, Knoxville, Tenn. to Sacramento, Calif. with just one connection.
"Forget Mumbai and New Delhi. There’s another 40 secondary cities in India that I can take advantage of," says Etihad CEO James Hogan.
Airlines and governments in North America and Europe have been fighting back where they can.
In Canada, the government has limited the number of planes that Etihad, Emirates and Qatar can land at its airports. The move protects Air Canada, and its partner Lufthansa, which have a good business flying Canadians to India, Africa and Asia.
Separately, Lufthansa has tried to block the Gulf carriers’ access to German airports. Etihad responded by purchasing 29 per cent of rival Air Berlin, gaining entry to key European cities. It also owns 40 per cent of Air Seychelles and smaller stakes in Virgin Australia and Irish carrier Aer Lingus.
"Working against us or trying to isolate us will not succeed because there is a very clear vision behind these airlines and we will keep on expanding," says Qatar’s CEO Akbar Al Baker.