Saudi Arabia's Domestic Market, The Final Stretch.

When everyone almost forgot about the two operating licenses that GACA awarded to Qatar Airways and Gulf Air-Abdel Hadi Al-Qahtani and Sons Co in late 2012. 

During the Dubai 2013 Qatar Airways announced it will launch Al Maha Airways in the first half of 2014 using aircraft from Qatar Airways. However, the management of Al Maha Airways will be independent from the airline and staff will be directly hired.

Similarly, Al Qahtani Group announced the launch of Saudi Gulf Airlines based in Dammam. Gulf Air denied that it has applied for or was awarded an operating license by GACA. Gulf Air is a consultant to the new airline assisting it in obtaining GACA approvals. The airline will start operating in Winter 2014. To date Saudi Gulf Airlines have not indicated the type of equipment it will be operating.

Both airlines will start operating to major cities (Riyadh and Jeddah), second tier cities, regional and international route as they develop.

How much coordination, and there will be some, between Al Maha Airways and its owner Qatar Airways is something to look for in the near future. 

As we await developments of the new airlines; Nasair the low cost carrier has followed in the footsteps of flydubai and will introduce business class on some of its routes, primarily for religious tourism and eventually for corporate clients.

Left Out.....

The last few months and certainly weeks have seen mega activities by the Global Airlines of the Gulf.
It seems the critics and adversaries of yesterday are the partners of today. A fact all airlines should heed.

It is official and in spite of Mr. Al Baker's earlier denials, Qatar Airways is joining Oneworld. Qatar Airways is a massive addition to the Oneworld network, considering that the airline has massive aircraft orders which usually translate into additional destinations.

Etihad has just signed with Air France - KLM a code share agreement. Airberlin also signed a similar  code share arrangement. There is also discussions about joint procurement and closer cooperation. 

Etihad seems to be working equally comfortably with both Oneworld and SKYTEAM alliances.

Emirates and Qantas, a Oneworld member, signed a code share agreement that has Qantas shifting its Singapore base to Dubai and terminating a long term agreement with BA its Oneworld partner.

Currently Qatar Airways has several code share agreements with Star Alliance airlines (Lufthansa, United and ANA among others), but nothing on the scale seen above (equity stakes, alliance joining and long term agreements).

Is Star Alliance (the largest of the three in terms of member airlines) being left out by design or just a coincidence? Only time will tell...

Qatar Airways and The Iran Connection

Qatar Airways is increasing its presence in Iran. The airline added 31 flights a week to its schedule, bringing it to 52 flights from 31 flights a week, a 150% increase (read the full story). It added a new destination, Isfahan with a daily flight and increased its frequencies to Tehran, Mashad and Shiraz.

What is more interesting is the news that Qatar Airways will start domestic flights within Iran by code sharing with a local carrier (read full story) to get around ownership issues.

Iran has been suffering from sanctions which prevented it from getting spares needed for western aircraft. The safety record of Iran aviation leaves a lot to be desired, 13 incidents since 2008 (view here). Interestingly more incidents on Russian built aircraft than western ones. It is welcome news to have modern well maintained aircraft flying domestic routes. That will definitely be a boost to civil aviation safety.

Qatar Airways will commercially do very well and will be able to channel passengers away from the competition to its regional and international services out of Doha. However, politically this maybe an
enterprise fraught with danger, unless of course the Americans and Europeans have tacitly given their
agreement to this venture. No speculations here, the future will tell.

Qatar Airways Extends Its Global Reach

Qatar Airways is expanding its presence in Brazil in a big way (click here for full story). Six months after starting its Sao Paolo service the airline signed a code share agreement with GOL Linhas aereas inteligentes Brazil's fastest growing low cost low fare airlines. The agreement covers Sao Paolo and 47 destinations in Brazil. The code share agreement allows Qatar Airways to use its QR code on all segments of a flight no matter where it originates on the Qatar Airways network and terminates on the GOL network. Both airlines have submitted a joint application for approvals and anti trust immunity to the Brazilian Civil Aviation Authority and the Antitrust Agency. They are also working on coordinating their Frequent Flyer Programs.

This agreement has the potential to extend the arrangement beyond Brazil to include GOLs international destinations in nine (9) countries, in the future.

Qatar Airways is aggressively pursuing a rapid expansion of its network in Brazil, South America's largest country and one of the world's rising economic powers. This arrangement will probably be replicated in other important markets to give the airline a larger global reach.

Emirates at 90 A380s

On Friday 19 June there were several tweets regarding Emirates purchase of an additional 32 A380s to bring up the total of ordered aircraft to 90. The other issue was how will deal with Emirates recent order and the prospects of mergers between Emirates and Etihad or Etihad and Qatar Airways.

Emirates success so far did not come from luck but was and is the result of well thought strategies and most of all, the efficient implementation of these strategies.

I am not going to try to second guess Emirate's reasoning for their latest order however;

1. Emirates operates into many congested airports and the A380 is the best way to increase its traffic without adding more aircraft. This will reduce the operating cost in the long run.

2. Many countries even those that profess open skies and liberal regimes are protective of their airlines. Last week France rejected additional slots requested by UAE carriers.

3. The aircraft will be delivered by 2017 and hopefully the global recession will be over and traffic would have picked up and financing will be easier to obtain especially if Emirates keeps producing healthy profits.

The Merger buzz was started by Qatar Airways CEO in his remarks at the IATA AGM as reported on ATW (click here for full story.). He asserted that there will only be two carriers in the Gulf and Qatar Airways is one of them, and all others will disappear. The response was, the region's airlines will undergo some consolidation.

Looking at the three big carriers in the region Emirates, Etihad and Qatar Airways they all share a common trait; most of their traffic is transiting traffic through their hubs. However, the UAE carriers have an advantage, a larger population, almost 7 million, as opposed to 1.5 million in Qatar. This provides additional traffic from expatriates and their extended familiestravelling to and from the UAE to their home countries. Further, Dubai and Abu Dhabi are more popular as tourist destinations than Doha. Qatar Airways is in a more vulnerable situation than its two competitors.

Is there going to be mergers between any pair of the three, I don't think so, simply because all three are considered by their governments as an integral part of their development plans.

Will any of them disappear I doubt it, why should they when their catchment area goes way beyond the region to encompass the world. They have become global airlines with networks that span the world.

The WOW Factor

A few days back I was asked off the record why do Etihad, Emirates and Qatar Airways always place in the top ten or top five rankings of travel and airline surveys.

Well, the cynical answer is their PR departments wine and dine magazine editors and journalists to write good things about them. Maybe.... but I don't think so.

To start with these are heavily branded airlines associated with football clubs, F1 racing, Tennis tournaments and other high profile cultural and sport activities. Most importantly they have what I like to call the WOW Factor;

1. New aircraft with brand new leading edge technology interiors

2. IFE systems so loaded with movies, music and games that time flies by.

3. Good point to point routes both short and especially long range that minimises multi stops

with their associated hassles of airports and airport security.

4. Good food and good service usually with a smile, consistent and enjoyable. I am not saying

they do not make mistakes but on the whole they are good.

5. And last but not least a serious commitment from the top down towards passenger service.

Not many legacy airlines can claim all the above attributes, the European carriers are starting to fray at the edges and the US carriers are so obsessed with security in the cabin that flying with some feels like being in a classroom, so uptight they sometimes forget to smile. There are the exceptional fun airlines but then most are not all Legacy Airlines.