Kingdom of Saudi Arabia, The Third Operating License

GACA, having indicated that the third AOC in the Kingdom will be offered to a foreign operator from the GCC, has short listed seven (7) out of the fourteen (14) proposals it has received earlier.

The seven finalists are:

Qatar Airways, Falcon Express Cargo Airlines, Nesma Holding Co, and the following consortia Bahrain Air - Saudia Private Aviation,  IDB - AlMasria Universal Airlines, Gulf Air - Abdel Hadi Al-Qahtani and Sons Co,, Chinese HNA Group (Hainan Airlines) - Saudi Mazaya Al Shabab Co.

It is expected that the winner of the air carrier license will be announced in September or October 2012, with a target for starting operations in the first quarter of 2013.

So far GACA is meeting its planned milestones (give or take a few months) and it will be interesting to see how this will pan out. 

Read full story here.

 

Qantas, Hard Times Ahead

It all started when Etihad acquired a 4.99% stake in Virgin Australia. Etihad has petitioned and obtained approval, earlier in the week from the Foreign Investment Review Board to raise its holding to 10% in Virgin Australia. Etihad acted in a very transparent manner similar to its actions in regards to the investments in Airberlin, Aer Lingus and Air Seychelles.

Qantas hit back with accusations that Etihad is the plaything of oil rich Sheiks.

This is not the first time Qantas resorts to similar tactics, it has accused Emirates of being an unsafe airline after the March 2009 incident with an A340-500 aircraft that failed to climb properly due to erroneous performance data entered.

Qantas had its fair share of unsafe incidents with the A380; incidents not attributed to its own actions. The airline was shutdown last October 2011 over a dispute with the labor unions over jobs. The airline like the rest of the industry suffered from high fuel prices. It is expected that Qantas profits are down by 90%.

Qantas is not unlike the legacy airlines of developed countries, that consider the preservation of their home market share as a national priority and are willing to limit the tourist potential of the country to their capability. They fail to consider that competition that increases the market brings in revenues and creates jobs. Usually, more jobs in different sectors of the economy that far outweigh potential losses at the airline.

There are economic and political considerations that go beyond an airline. A prime example is the Canadian government that blindly backed Air Canada's position over traffic rights for Emirates and Etihad and now is working hard mending fences. Vancouver is still under served by Air Canada while Seattle reaps the benefits of Emirate's daily flights.

Qantas faces tough choices on how to deal with what it perceives as a major threat. There were earlier rumors that Emirates wants to cooperate with Qantas to further develop its Australia network. Of course, Qantas can always work closer with Oneworld partners to improve its position, but then that means expansion which seems to go against the grain with legacy carriers that believe in capacity control.

2012 is a tough year, it presents multiple challenges and risks but also great opportunities for the visionaries and the brave.

Farnborough Air Show 2012

Farnborough air show this year should be interesting. Air shows successes are measured by the amount of business conducted, usually indicated by the value of the aircraft orders announced. With Qatar Airways, Emirates and Etihad, the traditional mega buyers, indicating there will be no aircraft orders announced this air show, one wonders at how successful this year's show will be.

The sentiment around the show is upbeat and optimistic, and I am sure there will be some NEO and MAX announcements and hopefully a few CS.

Boeing will be showcasing the Qatar Airways B787, readied ahead of time, an event that surely will please Mr. Albaker. Not to be outdone, Airbus threw in the A380 and the A400M for good measure. The weekend display will include a Battle of Britain Memorial and what appears to be the RAF's entire inventory of trainers and fighters.

Air shows should be fun events, business notwithstanding. So hopefully, English weather cooperating, this will turn out to be the most successfully FUN air show

Emirates, so good for India

Last week Emirates was in the news as usual,

Emirates indicated that they have no problem in investing in an Indian carrier, even if it is failing, provided it can be turned around. However, Emirates wants management control of the carrier, a similar arrangement it had with Sri Lankan. This worked fine for both carriers. India is a different ball game, it is a larger market which already feeds into the Emirates network, serving the millions of NRIs all over the globe. A well managed airline will provide the travelling public with options and opportunities especially when tied up with Emirates. The only catch, the government has not defined the terms for the proposed Direct Foreign Investment. The arrangement that Emirates want will surely kill Air India, B787 fleet not withstanding, and render Emirates the national carrier of India.

Read more here


The other interesting story is; traveling with kids to India, Emirates tickets seem to be cheaper than budget (low cost) airlines. After counting all the fees (bags, food, seats, IFE and more) levied by LCCs, the ticket price is actually higher than that charged by Emirates.

Read more here