2013 In Prespective

2013 has been an interesting year for aviation and the airline industry, in some ways a year of firsts. The following are some of the exciting events that will continue to shape the industry in 2014 and beyond. 

On board connectivity

Finally, the FCC and the FAA have paved the way to the use of mobile devices on board aircraft from departure to arrival, with inflight WI-FI available after 10,000 feet. The use of mobiles have triggered the debate of whether voice calls should be allowed; BA and Delta have decided not to allow mobile calls inflight, but the debate continues and most airlines awaiting passenger feedback. The prospect has raised the issue of cyber security with some airlines planning to have two (2) WI-FI networks on board; one for the cockpit and another for the cabin. 

The largest airline in the world 

The merger of American Airlines and US Airways is finalized creating the world's largest airline. Of course the road ahead is very difficult and how successful the new AA remains to be seen. Personally, I liked the old in bankruptcy AA the level of service improved and fleet renewal is underway.

The rise of the GULF Global carriers

The three Gulf carriers continued their double digit growth in different ways

- They launched the B777X along with Lufthansa and Cathay Pacific;

- Emirates ordered fifty (50) A380s and stabilized Airbus's production plans for the short term;

- Etihad equity stake in Jet Airways was finally approved. Etihad did not lose anytime in announcing its 

  plans for the Indian market;

- Etihad acquired 33% of Darwin Airlines, a Swiss regionals and will rebrand it as Etihad Regional.    

  Furthermore, they are in discussion with Alitalia for an equity stake; and

- Qatar Airways joined One World.

This prompted Star Alliance to invite Air India to join the alliance in an attempt by Lufthansa to preserve its share of the Indian international market. More interesting is US carriers, lead by Delta, request for protection from the government to limit access of the Gulf carriers and other international carriers and access to EXIM Bank financing.

These are by no means the only events facing the industry in 2014 but probably will have a large impact. Barring major geopolitical and natural disasters the industry is expected to continue its growth, hopefully at a better rate than this year.

Wishing you all a Happy and Prosperous 2014

RJ at Fifty, Still Going Strong

This post appeared in RJ's in house employees magazine 

Amidst all the geopolitical turmoil of the last few years, Royal Jordanian has been able to maintain its pioneering spirit. It is not the oldest airline of the region nor the largest or richest. However, Royal Jordanian has always been at the forefront of the industry in the MENA region.

RJ has an innovative and can do spirit that meets challenges head on. I cannot recall a time when the MENA region did not have challenges from wars, invasions, blockades to uprisings. Issues that affect the stability, security, economy, tourism and the ability of people to travel.       

In spite of all this the airline managed to develop into a center of excellence.

The 1970s and 1980s, where times of rapid fleet expansion, with an increase in the B727/B747 fleets and the introduction of the L1011-500 and A310s followed by the A320s in 1990. The move to QAIA allowed the airline to rise to the challenge and was capable to efficiently operate and maintain the advanced new aircraft. The larger facilities allowed the airline to develop its heavy maintenance, engine overhaul, training and catering capabilities. The airline was always at the leading edge of technology, in 1983 it started operation of the L1011-500, the most advanced digital aircraft of its time. It was among the first to operate the A320, the first fly by wire aircraft and to introduce the large regional jets the Embraer ERJ175/195 to the MENA region.

In 2007 the airline was privatized, the first government airline of the region, a long and arduous process. The airline had to sell off almost all of its ancillary services, this drew criticism but in the final analysis it helped to broaden the aviation base in Jordan. New capabilities were introduced that otherwise would not have been. In the same year RJ joined One World The first MENA carrier to join a global alliance. The airline had to meet the alliance service delivery standards.

In the last few years the airline rolled over its fleet. The A310 passenger aircraft were retired and the A320 fleet was replaced by new A321/A320/A319 aircraft. The A340s were refurbished and the A330s were introduced to fill the gap until the delivery of the B787s, in the last quarter of 2014. The e-enabled B787 encompasses challenging leading edge technologies.

Royal Jordanian is a trend setter and has a can do spirit that rises to meet all challenges. This is achieved through a dedicated and well trained workforce. A workforce that is ready to go the extra mile to achieve its goals. The airline developed and thrived in spite of internal and regional challenges and in the process helped other airlines especially those in the Gulf region to develop. As the airline celebrates its 50^th anniversary, the same pioneering, innovative and can do spirit still prevails. Aviation is an industry that is about people; those who travel and those who make their travel possible in a safe, secure and comfortable manner.                          

No Airline exemplifies this as Royal Jordanian does.

Emirates, A Force of Stability or Disruption

Emirates, the largest international carrier and the oldest of the three Gulf Global Airlines, evokes confidence, distrust, and a sense of foreboding  with every decision it makes from buying aircraft to announcing new routes

If you are Airbus or Boeing, you value Emirates as a force of stability in aviation. Six (6) weeks after 9/11, when legacy airlines all over the world were reeling from the events of that day: grounding aircraft and laying off employees specially in the USA and Europe. Emirates, during the Dubai Airshow 2001, did the unthinkable and ordered USD 15.6 Billions worth of aircraft.

• Twenty five (25) B777s
• Twenty Two (22) A380s
• Eight (8) A340-600s
• Three (3) A330s

In Dubai Airshow 2013 Emirates did it again it helped launch the B777X with an order of one hundred and fifty (150) plus another fifty (50) options and ordered another fifty (50) A380s helping Airbus to stabilize the A380 production line for the near future.

Undoubtedly, Emirates is (was) rewarded for its good deeds with very attractive pricing, well below what the competition gets. Something that reflects favorably on its yields and financial results.

On the other hand, legacy carriers specially Delta, American, Qantas, Air Canada, Air France and Lufthansa considered Emirates (Etihad and Qatar Airways) as mere toys of oil rich desert princes and heavily subsidized government airlines. They are considered by Delta and the A4A as the most disruptive force in the industry. 

Fast forward to the present and the critics of yesterday are the partners of today

• Qantas has a great agreement with Emirates, resulting int the transfer of its Singapore hub to Dubai. The deal has been profitable for both airlines;
• Air Canada whose position on additional frequencies for Etihad and Emirates escalated into a diplomatic rift between the UAE and Canada, now has a code share with Etihad;
• Qatar Airways is a member of One World;
• American Airlines and Etihad has a code share agreement; and
• Air France KLM has signed a very deep and extensive code share agreement with Etihad.

It is understandable when EU airlines complain about the Gulf airlines, they actually compete with them; directly between their respective hubs and on connecting traffic to Europe, USA and Latin America. These new entrants have shifted the center of aviation, from Europe as a hub between the Americas and the other side of the globe, to their Gulf hubs. US airlines never really competed directly with Emirates or the other two global airlines, so the complaining and whining is somewhat surprising.

Emirates competes on service, passenger amenities and convenience. Their First and Business classes are rarely discounted and if you think their fares are low, think again, they are not. However, the service is exemplary, their seats and cabin are leading edge and ICE (their IFE system) is out of this world. Emirates knows how to fill its flights. They actually make money, not because they are subsidized but because they keep airplanes full at the right yields, and they buy their aircraft at the right time and the right price.

They also sponsor sports clubs and events, spending millions of dollars to make sure that the name of Emirates is seen by millions of people across the globe while watching soccer, tennis or Formula 1 among others. Emirates and the others invest in lounges, media promotions and sports to keep the brand global.

Emirates works hard at increasing the productivity and efficiency of its operations, but it pays attention to its expansion.

 Emirates Vision and Values clearly explains their methodology for success

A strong and stable leadership team, ambitious yet calculated decision-making and ground-breaking ideas all contribute to the creation of great companies. Of course, these have played a major part in our development, but we believe our business ethics are the foundation on which our success has been built. Caring for our employees and stakeholders, as well as the environment and the communities we serve, have played a huge part in our past and will continue to shape our future.

Etihad's Anniversary Splash

Etihad celebrated its tenth anniversary with a splash.

• The Jet Airways 24% equity deal was finally approved by the Indian Cabinet setting the stage for expansion into India. 
• Air Serbia 49% equity deal setting the stage for expansion in Central Europe

All this is old news. Dubai Airshow was the stage of its splurge on aircraft orders:

• Fifty (50) A350s;
• Thirty Six (36) A320NEOs;
• One (1) A330F;
• Twenty Five (25) B777X (launch customer for the -8)
• Thirty (30) B787s (bringing the total Boeing orders to 1000 aircraft and becoming the largest operator of the type);
• One (1) B777F.

All these aircraft are not intended for Etihad's fleet only, some will be used for their equity partners.

On a quieter note Etihad announced the launch of its new route to Zurich in June 2014 and almost in the same breath announced the launch of Etihad Regional, not in the Gulf or MENA but in Europe. Darwin Airline in Switzerland, Etihad acquired a 33.3% equity stake in the regional airline. The idea is for Darwin Airline, which will be rebranded as ETIHAD REGIONAL is to feed traffic to Etihad and its equity partners' hubs in Europe for onward travel. Eihad Regional will add 21 new routes and 18 new destinations by mid 2014 to Etihad gateways in Europe (Geneva, Paris, Amsterdam, Dusseldorf, Belgrade and Zurich). Will this be the only regional airline equity acquisition or just the first in many more to come.

If the aircraft orders upset some US carriers and A4A, the European response to Etihad Regional has been almost non existent. 

Time will tell how this will evolve for now Happy Anniversary Etihad...

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.

Anniversaries

It appears that everything I was involved with in my professional life has an anniversary and a milestone this year.

• Royal Jordanian (RJA) is celebrating its 50th Anniversary
• Air Arabia (ABY) is celebrating its 10th Anniversary
• Etihad (EY) is celebrating its 10th Anniversary
• Al Jaber Aviation (AJA) celebrated its 5th Anniversary

My involvement with each organization varied but I always managed to learn  and contribute.

I joined RJA at a time when the airline was expanding its fleet with new B727s, B747 and L1011s. A new cycle of  B707 heavy maintenance (D) checks was starting and the decision was made to bring the capability inhouse. The planning was done and the new hangar at QAIA was used before the airport was completed. It was an exciting time, then capabilities for B727 and L1011 was developed, it felt like routine. The next milestone was the introduction of the A310s and A320s into the fleet.

Of course there were other challenges some good others not so good. The development of third party contract maintenance that went a long way to cover the Maintenance and Engineering Department costs. Then the first Gulf War that shut down the airlines for four (4) months; but every challenge is an opportunity we performed a B727 D check and B707 D check for a customer. RJ has a pioneering spirit, it was always a tad bureaucratic, but when the chips were down everyone came together and made things happen, a real can do attitude.

At the age of 50 the airline still has this attitude, it has the ability to rebound from challenges; most of them global geopolitical (wars, uprisings, financial crisis, etc.).

RJ brought home the value of "if there is a will there is a way" and doing great things on a budget. I spent eighteen (18) years there and made life long friends.

Start ups are messy affairs. They are hard work and require focus, perseverance and resilience, and all that before first flight. Once operations start it is even messier.

I was at GAMCO now ADAT at the time Air Arabia and Etihad started. I was tasked to ensure an MCC and a scheduling unit are operational at the time the airline begin operations. Both airlines started within a week of each other, ABY on 28 October and EY on 5 November 2003. Small beginnings leading to greater things.

Working for an LCC is a life changing experience. I joined Air Arabia on November 1, 2004, a year after commencing operations. An LCC is a way of life that looks at value for money, efficiency and productivity in a way no legacy airline ever does. I worked for RJA and we were frugal, ABY took that to a higher standard.

Legacy airlines ignored ABY at first as a flash in the pan and an experiment that is bound to fail. Until they felt the heat and then we felt the pressure. Ten profitable years later, ABY is there to stay, true to its business model when others came and failed or changed.

I joned Al Jaber Aviation in October 2008 going from an LCC to a VVIP Corporate Jet Operator. Getting an AOC must be one of the most challenging things a person can do. I heard stories in ABY of working out of a few offices in Sharjah Cargo Building. Well at AJA it was a few offices out of Al Bateen Airport when it was still an air base. Having GCAA inspections while still building offices and  getting manuals approved and licenses accepted before starting operation requires staying power. The first aircraft, an Embraer Legacy 600 was delivered three weeks before the AOC was issued. The proving flights and final GCAA inspections were performed and the AOC was delivered on June 1, 2009 at the time of the second Legacy 600 delivery. The AMO Certificate was issued on 28 May 2009. Operating business jets is totally different than scheduled carriers. There is no schedule and flights are launched at relatively short notice, because even planned flights change at short notice as clients' change plans.

Thirty Five years later, I am starting all over again. Start ups are still messy and require focus, staying power and resilience.

Well 2013 is definitely a year of challenges and milestones. These four (4) airlines regardless of their age still face challenges some are internal but most are external. They all need to look internally and determine what is needed for them to thrive in the next decade. What brought them so far may not and probably is not what will take them forward. After all, successful companies fail because they insist on doing what made them successful in the first place, ignoring the ever changing environment they operate in. Things change and so should organizations.

For now, Happy Anniversary to all four airlines and to my friends and colleagues who are still there, moved on or retired. We all shared experiences, challenges and yes good times. Looking forward to the continued success of Royal Jordanian, Air Arabia, Etihad and AJA.

Spirit Airlines, the ULCC

Spirit Airlines one of the few Ultra Low Cost Carriers (ULCC) in the USA and indeed the world.
Spirit does not have the best of reputations mainly because its customer service due to the unwavering and rigid adherence to its internal rules.

I have flown Spirit in late 2006 when seats still reclined and carry on luggage was free, things have changed since. Spirit charges for everything, it is displayed clearly on their website; from checked baggage, to carry on luggage, to seat assignments and a few other things. I, personally think that all airlines should charge for carry on luggage just to stop people from going around the checked baggage fees and clear some overhead bins for others.

One feature of its aircraft are the first two (2) double seat rows and extra leg rooms, well worth the fee. I had mixed feelings about the non reclining A320 seats, on the one hand they get to be uncomfortable on a long flight but on the other hand you tend not to get the back of the seat in front of you in your face.

So going to NBAA 2013 in Las Vegas I flew with Spirit from Detroit. It was the perfect flight as far as a ULCC goes.

• I received the email advising me of online check in. 
• The staff at the airport were smiling and helpful. 
• The boarding was flawless and we departed on time.

However, the return flight was totally different. I never got the email to advise me about online check in.
It happens but I tried anyway and the system did not let me; the aircraft was delayed for two hours. So now
I know, same thing happened at the airport with self checking kiosks. That by itself was not a problem, a helpful ground agent got me my boarding pass.

Things went downhill when past the 10:10 pm departure time the flight departures monitor still showed the original timings, this was changed to delayed past midnight. No announcements were made, no explanations given and after five hours we departed. I understand that passengers are told to check the departures information monitors, but at least keep them updated!! This total disregard of basic customer service tends to wipe out all the goodwill gained throughout the check in and boarding processes.

Would I fly with them again, only if I have to.

NBAA 2013

Living in the UAE one tends to attend the regional business aviation shows. MEBAA has always provided a venue for business aviation professional from MENA and the world to meet. Last week (October 22-24),
I attended my first NBAA Convention and Exhibition in Las Vegas. The venue was huge, but so was the event, after all the USA is by far the largest and most mature business aviation market in the world.

Compared to other industry and trade events I attended, the mood was definitely upbeat. The halls were buzzing with activities and discussions. The people I talked to were all optimistic that things have turned around and that 2014 is going to be a good year.

What is most impressive about the NBAA is the amount of educational venues that were provided free of charge during the convention. The value of these venues in terms of knowledge and networking is priceless.

Aviation's Emerging Threat, Cyber-security

Technology advances, are rendering the aircraft and the air traffic system  more and more automated and connected . New generation e-Enabled aircraft (A380, A350, B787, C Series and others including a few business jets) have their systems linked to ground based systems in the form of real time data uploads and downloads to derive operational efficiencies.

e-Enabled aircraft have unique networking, computing, security, certification and physical operating requirements that renders integration a daunting challenge. These systems and domains are

•  Flight Deck {Electronic Flight Bag (EFB) Class III)
• Avionics Data {Sat Comm, ACARS and avionics}
• Open Networking { Avionics interfaces, Servers, Terminal Wireless, Network appliances and Core Network}
• Maintenance { Software Loading and Maintenance Access}
• Cabin and Airline Services { FOQA Data, FA terminals and crew wireless}
• Passenger { IFE, wi-fi and Cell phones}

e-Enabled aircraft derive efficiency by integrating and connecting in real time the following functions:

• EFB 
• Integrated Materials Management
• Airline Flight Operations
• Maintenance Performance
• Airplane Health Management

Add to this the evolving automation in  Air Traffic Management through the Automatic Dependent Surveillance (ADS-B and ADS-C), Future Air Navigation System (FANS), Controller Pilot Data Link Communication (CPDLC) and NextGEN. 

All the above requires internet and wireless connections between the various ground centers and the aircraft:

• OEMs
• Airlines Centers
• Maintenance Providers
• Airports and their various ancillary functions

The threat of someone hacking into a ground network and interfering with downloading or uploading data to and from an aircraft and eventually the aircraft systems is possible, if this someone is willing to take the risk. This represents an emerging risk to safety and security. The risk is real that several countries in their National Civil Aviation Safety Programs (NCASP) and their Security regulations require their airlines to secure their systems and aircraft against cyber-security threats.

This is an emerging threat with no developed standards for risk assessment of ground based IT systems. This is not endemic only to aviation. The National Institute of Standards and Technology (NIST) is rapidly developing a set of guidelines and best practices for better security for IT systems that will; once developed provide guidance to organizations on how to manage cyber-security risk in a similar manner to financial, safety and operational risks.

This has prompted ICAO, FAA, EASA, IATA, OEMs and other interested parties to start discussion regarding cyber-security threats to aviation. This effort will take several years before it evolves into a working standard and a few more years for implementation. 

Meanwhile, threats evolve.

A New Religion Or Just A Cult

It is the "new religion of capacity constraint" as AWST calls it in its August 5 -12, 2013 edition, is what US carriers attribute their profitability to. Ten airlines collectively posted a net profit of US$1.6 billions in H1 2013 up from the US$1.2 billions for the same period in 2012 (click here for full story) a 2.1% net profit on a US$ 70 Billions turnover. Not stellar by any means but phenomenal for an industry that could hardly make money or recover since 9/11. For some reason Wall Street loves it, go figure and A4A reckons that this will allow US carriers to effectively compete globally. The airlines are reinvesting their profits into new technology aircraft and on board passenger amenities for the first time since a decade.

A closer look does not paint such a rosy outlook.

For starters, capacity constraint entailed initially the shedding of  aircraft, jobs and routes.It was not until recently that airlines started hiring. The last decade witnessed the consolidation of the legacy carriers Delta/Northwest, United/Continental, Southwest/America West and recently the yet to be approved America/US Airways. Mergers that were touted to benefit the consumer, in spite of all the turmoil of merging and shedding jobs and routes. It also reduced the passenger service to the level of the worst of the two airlines. Since then service levels, whether on time performance or passenger services, have improved and better service is offered on business class/first class domestically slowly spilling into economy class.

Most of the large carriers have put in orders for the new generation high technology aircraft except for Delta. Delta does not want to go through the teething pains of aircraft like the B787 or A350 but would rather invest in B717s from Southwest and MD80s from SAS because they reckon fuel prices are not an issue, after all they own a refinery. But then how would Delta compete against fuel efficient passenger pleasing high technology aircraft; only time will tell.

The airlines have decided that fifty (50) seats aircraft are not what they need and have invested in one hundred (100) seats, new technology fuel efficient aircraft, a great move. The seats offered did not increase after all capacity is expected to rise by 1.4% by Q4 2013 compared to the same period in 2012. So practically the number of operating aircraft is going to be less which means more passengers will fly on routes, hopefully profitable ones but then there will be less routes flown by less aircraft.

The airline costs have marginally risen as a result of new labor contracts and higher maintenance costs only to be saved by stable fuel prices and guess what, the infamous ancillary fees. Whenever, the airlines are in trouble, they just raise their fees, no explanations needed. 2012 was a record year and the airlines collected US$ 6 billions in baggage and reservation change fees, I expect 2013 will be more of the same. This allows the airlines to boast that ticket prices are being held back.

Even though the airlines have improved aircraft efficiency and staff productivity, their profits still come from fees and not from core airline activities.

No one ever got prosperous by holding growth. Holding capacity will not generate added revenues for the airlines and whatever efficiency and productivity new aircraft will provide will be offset by payments to cover the new assets lease or loan payments. Domestically, the airlines are consolidating and practically reducing competition; they have some sort of control of the playing field, maybe not for long as seen from the Department of Justice reaction to the AA/US Airways merger plan. Internationally, it is a different ball game, the competition is with aggressive, full service and award winning airlines that are innovative and firm believers in growth from the Far East and MENA. To effectively compete globally, the US airlines have to really leave their comfort zone and start being innovative instead of whining about EXIM Bank financing or deep pockets of rich nations.

Is it really a new religion or just a cult?

Emirates Evolution

Emirates Airlines has always been about Dubai and will always be about Dubai.
Nevertheless, Emirates is exploring new venues to increase its reach and support its expansion. As of
October 1, 2013 Emirates will fly one daily return flight between Milan and New York using a three class B777-300ER. This flight will increase the DXB/JFK flights to three daily return flights. Emirates will be competing with Delta, American and Alitalia on this route; it offers the best aircraft a B777 (A330 (AZ) and B767 (DL and AA)) and by far the best product and passenger experience.

Following the Qantas deal Emirates has indicated that it may look at flying to America from hubs in Asia as a continuation of a Dubai flight from places like Singapore or Hong Kong.

Last week Emirates, UK VP intimated that Emirates is not ruling out entering the North Atlantic market with flights to the USA through its hubs in north of England (Glasgow, Newcastle, Birmingham and Manchester). Emirates carried eight hundred thousand (800,000) passengers last year on these routes and has been upping the capacity in terms of aircraft size and frequencies. Emirates looks at it from the point of view of reducing congestion in LHR and providing a service to its customers in the region. One opportunity may shortly present itself with the EU requiring AA and US Airways to give up their LHR/PHL route after the merger.

Other than the Milan to New York flight in October everything else is speculation. However, the subject is out in the open and based on how the Milan flights do, Emirates may develop more hub cities.

ASA Twentieth Anniversay

Last week I had the privilege of attending the Aviation Suppliers Association (ASA) annual conference, from the 9th to the 11th of July 2013 in Las Vegas which also marked the association's Twentieth Anniversary.

Having worked for airlines and MROs dealing with approved vendor lists and suppliers' approvals, one becomes very familiar with the ASA-100 Quality System Standard, one of the most respected supplier certifications based on the FAA's AC 00-56A (Voluntary Industry Distributor Accreditation Program).
ASA maintains and ensures that the quality standard is updated and is rigorously applied.

One day in the conference is dedicated to the Quality Committee, where quality issues ranging from common audit findings and updates to the standards (ASA-100/ISO9001/AS9100/AS9120) to Law Enforcement Initiatives were discussed. ASA is not only an accreditation body, it is also an advocate for the industry on issues such as Counterfeit Parts, PMA Parts to FAA Part 21 and Designee policy among others. The association ensures the views of its members and the suppliers community on the whole are heard, proactively helping to shape regulations and policies.

Another aspect of the conference is the time dedicated to workshops and training, a total of eight (8) workshops in two (2) days.

On a personal note, the conference provided me with a unique insight of the hard work ASA does, not only to maintain the standard and support it with training but the advocacy work it does to defend the interests of the industry and its members.

And as Ms Dickstein, the association's President, said What happens in Vegas this time does not have to stay in Vegas and I totally agree.

Kudos ASA and Congratulations, keep up the good work.

Doing Business in America

Working in MENA one tends to deal with international companies in general. Companies that have staff familiar with the region. So relocating to the USA and attempting to start an "aviation related" business is a totally different experience. For starters, the majority of the aviation related small and medium enterprises (SME) are oblivious to an international market and are not interested in one. Fair enough, the USA is a huge market, who needs the rest of the world. That in itself is not a problem.

Being new in the region I relied extensively on LinkedIn to develop contacts and leads and to look at potential jobs. The majority of SMEs would not even acknowledge an email, a few would answer in a few weeks and a small number would respond within forty eight hours. 

The most popular response is; we are growing the business and we have no openings or projects at this time however we have a finder fee policy for any business you may bring. I understand times are tough and the market is stagnant but to be unwilling to explore opportunities and open a dialog on how to grow the business is beyond me. How can anyone grow a business without communicating, without telling the market place what are they doing and where they want to go? 

There is nothing wrong with finder fees; but to recommend and refer a business lead, one needs to understand that business and what differentiates it from the others. These businesses need to explore what adds value to their product and how to improve it. This requires communication, a commodity that seems to be in short supply in the aviation SME community. It appears no one is willing to invest time in growing their business.

These are first impressions and as I gain experience things may look different. 

Flydubai: From a Low Cost to a Hybrid Airline

Flydubai is introducing a Business Class (click here for full story) as of October 2013 with a soft start on selected flights in August 2013 after the delivery of its first two (2) class aircraft. A twelve (12) seats at 42 inches pitch dedicated cabin with 900 hours of IFE on a 12.1 inches HD touch screen. A full Business Class service with a lounge, dedicated check in, priority baggage collection and other amenities. Flydubai just changed its business model from a low cost carrier to a hybrid if not legacy airline following in the footsteps of Bahrain Air. Who will bear the cost of this offering remains to be seen. Are we looking at a low cost business model? not really looking at what Flydubai is offering.


The reason for the change, passenger feedback!!! Ah well, why would a passenger looking for low fares want to pay for a Business Class service. I guess some passengers wanting to interline with Emirates flying in Business would want that.

To put things in context, Flydubai and Emirates passengers can book flights that start with one airline and continue on the other (interline) on either website. Passengers and luggage are transferred from one terminal to the other free of charge.

The main beneficiary of this change is Emirates, they will get additional Business Class feed from the growing network (now at 60 destinations) of Flydubai especially destinations not served by Emirates into theirs. I am sure there will be some schedule tweaking  from these destinations to optimize connecting times.

Dubai has always evolved and Flydubai should not be any different. Only time will tell how this move will impact costs at Flydubai and to a certain extent Emirates.

Simply India

"I don't see any major problem for the deal" quoting India's Civil Aviation minister as the JetIhad deal was put on hold by the Foreign Investment Promotion Board (FIPB) and the Securities and Exchange Board of India (SCIB). Both have requested more details on the deal in terms of how much control Etihad will have in Jet Airways relative to its 24% stake. The issue seems to be all about effective management and control. Etihad and Jet Airways will meet both regulators requirements, it is not in their interest no to.

After the approval of the FIPB, the issue will be presented to the Cabinet Committee on Economic Affairs for final approval. 

It is not that the various regulators require clarifications that is a problem in India. It is the fact that one regulator approves the deal and things start moving along before the others clear it. One would think that there is a well thought out process for approving FDI, having talked about it so much, obviously not. 

Thoughts on Emirates Response to Jetihad

This post was first published in Bangalore Aviation as a part of a guest post titled Three-way Analysis: How does Emirates respond to Jetihad? written in collaboration with Devesh Agarwal and Vinay Bhaskara of Bangalore Aviation. This blog has been enhanced with their insight of the Indian aviation industry and government dynamics.

The Indian government has the knack of making interesting decisions like encouraging Air India to dump prices to gain market share causing mayhem in the market place and increasing Air India’s losses or Allowing Air Asia to invest in Indian aviation by approving a JV with the Tata and Bhatia group, creating an LCC that will put pressure on Indigo and SpiceJet. The latest was quadrupling the number of seats between India and Abu Dhabi which will benefit mostly Jet Airways and Etihad or Jetihad. 

In a Bangalore Aviation recent blog (http://www.bangaloreaviation.com/2013/04/infographic-airline-wise-share-of.html ) on International Traffic Share in and out of India showed Jet Airways share at 16.01%, Emirates at 13.04% and Etihad at 1.95%. The India market is important to the GCC carriers it provides feed to MENA, Europe and North America, a market that is being developed by these carriers with a station starting almost every month, the latest is Qatar Airways to Philadelphia. The latest India/UAE bilateral will almost double the allocated per week seats of Jetihad over Emirates.

Dubai has unofficially asked for a doubling of the per week seat allocation but requested an increase from 54200 to 72400 seats per week. 

Emirates can opt for an FDI in one of the LCCs and collect the prize of added capacity, an unlikely option after their earlier experience with SriLankan.

One option is for Emirates to code share with one of the large domestic players like Indigo or SpiceJet in order to increase its India feed and encourage them to operate into Dubai. Emirates currently code share with Jet Airways on the Mumbai and Delhi daily flights to Dubai. Flydubai flies only to three destinations Hyderabad, Ahmedabad and Lucknow and would like to increase its India destinations (which is less than 2% of its capacity). Flydubai is capable to fly to smaller secondary airports providing feed to Emirates through the link on their respective websites.

Code sharing is a short term solution. Ultimately, the real solution has to be through the India-UAE bilateral. Emirates needs the increased capacity for itself and Flydubai. Emirates can leverage Dubai’s position as a global hub and destination for Indians. Indians are the top expatriate investors in Dubai property (9 Billion AED) and the UAE is the second trading partner of India and has billions of dollars in investments. Add to the mix, almost two (2) million NRIs living in the UAE, a good proportion affluent. Dubai can also leverage its stature in the UAE to push the boundaries of the bilateral. Jetihad has shown that Air India and indeed the airline industry interests can be put aside by the government if the stakes and overall benefits are framed correctly. 

How Emirates and by extension Flydubai and indeed Air Arabia will frame their argument remains to be seen. Regardless, with the lack of a clear India Aviation Policy, the government will react to a properly framed request.

April, A Month of Surprises and Controversies

April has been an interesting month for Etihad and the region. No surprises, well maybe a few small ones.

The big news is Etihad's 24% equity stake in Jet Airways for $379 million, no surprises here.
This will increase Etihad's reach in India which was only 2% of India's international traffic in 2011/2012. It will also provide Jet Airways with an international hub in Abu Dhabi. The equity stake will come with the usual joint fuel purchases, insurance, maintenance and ground handling, etc. to save both airlines money.
 
The surprise is, two days later, the Indian Government signing an agreement with the UAE allowing for 50,000 seats weekly for each side from the current 13000 between India and Abu Dhabi phased in over 3 years. A move that miffed Indian carriers, and Jet airways wants 41600 seats (its current share is 4285 seats). So far so good, except Air India is now faced with a problem much bigger than Emirates. A GCC airline with a tremendous Indian market reach and feed. Air India is expected to get its act together and start competing, ah well more likely they will ask for more government subsidy, at a cost to the taxpayer which is much more than Etihad's FDI.

FDI was intended to inject foreign investment in the existing airlines to allow them to expand.
Well maybe not, earlier the Indian government approved a joint venture between Air Asia and the Tata Group, Air Asia India. A low cost airline that will compete with Spice Jet and Indigo. The two airlines least affected by the Etihad/Jet Airways deal. That will keep the aviation market in India in a state of flux.

Another surprise is a code share agreement between Air Canada and yes Etihad. Two years back a request for additional frequencies and destinations for Etihad and Emirates had Air Canada up in arms to the point that it strained diplomatic relations to the point the UAE government revoked the entry visa at arrival for Canadians among other things. Things have been improving and Canadians got their visas on arrival privileges back. It seems Air Canada realized there are Canadians living in the UAE.

Abu Dhabi was in the center of some controversy, a DHS proposal for a US Immigration and Customs pre clearance arrangement in Abu Dhabi. This had US Carriers, A4A and others complaining, putting it mildly, that this will provide an advantage to a foreign carrier in a city where no US carriers operate. Well, that prompted Dubai to put itself forward as an alternative, after all both Delta and United operate to Dubai and Emirates has more USA frequencies. I am sure we will be hearing about this in the coming few weeks.

Of course the old complaint of EXIM bank financing of foreign airlines' aircraft purchases came up again. Delta and others do not like it, according to them it affords foreign competitors owned by governments an undue advantage. These days competing aircraft are almost technically and operationally similar, so financing tips the balance. Europe has ECA to support Airbus, go figure Delta. Considering that US carriers don't even consider the MENA market worthwhile, taking the amount of direct flights to the region as an indication, the only thing it will achieve is loss of jobs at Boeing and their suppliers. US carriers have to learn to compete on service, I mean service comparable to GCC and Asian airlines and of course it would help if they increase the frequency from a daily flight to Dubai to a few other destinations in the region.

Last but not least, Qatar is demanding and Canada is resisting a request to move the ICAO headquarters from Montreal, where it has been since 1947. The reasons are location (too far for Europe and Asia), harsh winters, high taxes and of course visas, Canada makes it hard for delegates to get visas. Qatar proposed Doha as an alternative and is ready to build the new head quarters and fund the UN agency's running costs starting from 2017 (the lease for the HQ ends at the end of 2016)

On the lighter side of things passenger traffic increased in MENA and a few airlines were profitable!

MRO AMERICAS 2013

Aviation Week and Space Technology (AWST) runs the MRO Conference and Exhibition annually at various regions (Americas, Asia, Middle East, Europe etc...). Having worked in the UAE for more than a decade and a half, I have attended several MRO Middle East including the last one in Dubai in January 2013.

The MRO Conference and Exhibition provides a venue for international and regional speakers from the industry to discuss the state of aviation in general and the MRO sector in particular. The exhibition usually includes regional and international MROs that have a presence in the region allowing them to bring their latest developments to their customers and potential customers.

On a personal note the MRO Middle East exhibition provided me with the opportunity to catch up with friends and colleagues to discuss events both professional and personal. An exchange of views that though informal was important to remain current of what is happening in the region. The last MRO Middle East 2013 was an opportunity to say good bye to friends and colleagues before leaving to relocate to the USA.

MRO Americas 2013 (MROAM) held in Atlanta (16 to 18 April 2013) was an opportunity for me to observe how things are in the USA and in a way to introduce myself to a new market where I will be working.

MROAM is much bigger in terms of exhibitors and attendees than its Middle East equivalent. The conference had several sessions running simultaneously over the three days. Aviation is a truly global business,  so one sees the familiar large international MROs exhibiting alongside the USA regional players. The exhibition was well planned and it was easy to locate stands and booths.
The Aviation Week EVENTS app is a great help in locating exhibitors and keeping track of the conference sessions.

I was not expecting to meet many familiar faces at MROAM. Surprisingly, I was wrong. The value of MROAM for me was the opportunity to visit, observe and meet professionals from MROs in the USA and get the feel of how things are done. Things are not that different here, aviation is a truly global industry.

Flying With Delta

For me Delta was the best airline ever, not only in the USA but worldwide. It was the airline with the best service. The airline that had the most efficient and most content staff, who were paid as much as if not more that their unionized colleagues at other carriers. The staff who imposed the standards on themselves without management intervention. The staff that when things went bad bought the airline the "The Spirit of Delta" a B767-200 (N102DA) delivered on 15 December 1982; their way of contributing to their airline.

Things changed since then, the airline became unionized and then the merger with Northwest on 14 April 2008. The merger made Delta the airline of Detroit.

I never flew with Delta before, but they had better flights than AA to Atlanta. So Delta it was.

Delta's ground staff are great and very helpful and they will take the extra mile to help. I had a missing "S" in my name on the boarding pass that the TSA in Atlanta required to be addressed. The Delta Agent did his utmost to the point of walking with me to the TSA security area to ensure I had no problems. Great but they work on their own tempo which is kinda slow.

Their FAs to my surprise did not smile, out of Detroit and were a little sloppy; one passenger had her tray table open and was working another had his noise cancelling headphones on, during landing. On the way back the FAs did smile a bit more but they were loud making remarks to each other.

On the way back, the aircraft diverted to Cincinnati due to thunderstorms at Detroit. The Captain did a great job explaining the reasons and how long is the expected wait, they even got one of the dispatchers to explain things. It was not too bad, we took off after one hour and a half. Still while the Captain did a superb job the FAs performance was lackluster.

One would say, you get this with all airlines, maybe. Maybe my expectations were much higher.

Dubai World Central Taking Off

Dubai World Central (DWC), Dubai's mega airport designed to accommodate 160 million passengers has suffered delays in opening. Airlines have been reluctant to move out of Dubai International and relocate to DWC. The aprons are becoming more and more congested as Emirates and Flydubai increase their fleet size and frequencies and international carriers operations increase. 

Currently, DWC is used by a handful of Cargo Carriers. Dubai International has been trying for years to move Business Aviation to DWC without much success until recently when Execujet and Jet Aviation joined DC Aviation at DWC. Currently DWC has one runway and a low cost terminal and no further development will happen before 2018, when the last development in Dubai International is completed. Only then will the other 4 runways and passenger terminals be built to accommodate an Emirates Airline move in 2025 (Dubai World Central, A Vision Delayed).

Last week it was announced that nasair a low cost carrier from KSA and Wizz Air another low cost carrier from Hungary will commence operation on 27 October 2013 to DWC. Wizz Air is a new entrant to the Dubai market, however nasair, already operating from Dubai International will be adding up to another 10 weekly additional frequencies to DWC. Dubai Airports estimates DWC will have around 30 carriers operating into it by 2015, a very ambitious plan.

The final qualification of the terminal will commence now to support the October opening. The terminal was the venue of MEBA 2012 last December 2012. DWC has an access problem at the moment because of its remote location. The RTA will as usual will come up with solutions that will  alleviate the problem.

Finally, DWC will be the new home for the Dubai Air Show starting this year and MEBAA.

Emergency Response and Crisis Management!!

Today, April 1, 2013 in the early morning a suspicious looking device was detected in an X-ray machine at a security station at Detroit Metro's North Terminal. The bomb squad was called and passengers where evacuated to the old Smith Terminal at 5:50 am. The all clear was given at 8:20 am.

There were no scenes of panic and passengers braved cold temperatures as they walked to Smith, some of them in vacation clothes. It was more confusion than panic. Watching the networks in the morning, it was obvious that Detroit Metro's Emergency Response plan did not work too good.

Access to the North Terminal was blocked by Police cruisers and passengers arriving to the terminal were told to go back from where they came (it appears that none were told to go to Smith Terminal to wait). There was no indication that between the time the North Terminal was evacuated and then reopened that a press briefing was conducted or passengers appraised of the situation.

Not exactly the best response to a crisis. Detroit Metro you gotta do better.

Flying Domestic

Other than American Eagle between Detroit and Chicago, I have not done any domestic flying in the continental USA. Last week I flew to San Antonio (SAT) via Dallas Fort Worth (DFW) from Detroit (DTW) with the "New American" (AA).

Detroit is definitely under-served, the airport is rebranding with a new logo and improved  multilingual signage but still using Boingo for its Wi-Fi services. Both DFW and SAT offer free open Wi-Fi which is very convenient when one has to spend a couple of hours. DFW's Sky Link is so convenient and so efficient it took less than five (5) minutes to transfer from Terminals C to A compared to twenty (20) minutes in Paris CDG using an archaic bus system.

Having traveled extensively with AA on International routes, flying domestic was not something I was looking forward to, having heard all the horror stories of flying domestic in general. Well, it has been a long time since I was on a Super 80 (MD-80), I mean decades. AA needs to replace them and soon. Having said that, the aircraft were clean, all departed on time and all had Wi-Fi (gogoinflight)

it was not expensive but for short flights it was not worth it.

Travelling in what AA calls First on the MD-80 was a pleasant surprise at least on the longer sectors (almost three (3) hours) DTW-DFW-DTW, the service was great and the food was good very similar to Business on International flights (OK it is not Emirates or Etihad, but nevertheless good). On the shorter sectors it was a beverage in a real glass and a bag of pretzels, of which they offered seconds. On the whole I was impressed all things considered.

Kudos AA

Sustaining The Growth, MENA's Airports

MENA is the fastest growing region in terms of Passenger growth, around 15% against a global average of 6% and Air Freight growth of 14.7% against a global decline of -1.5%. To sustain this growth most of the airlines of the region are still taking deliveries of aircraft or have just concluded fleet renewals and expansions. However, this is only part of the sustainability picture, the other part being infrastructure.

Airports or lack of them have been the industry's biggest problem, but not in MENA. In March/April 2013 two (2) major airports would have come online and;

1. Amman Queen Alia International Airport (QAIA) opened the new terminal on 14 March 2013  

    providing a  nine (9) million passengers annual capacity. The final phase will bring that capacity   

    to twelve (12) million passengers.

2. Doha's Hamad International Airport (HIA) will open Concourse B from 1 April 2013 with ten (10) 

    airlines operating (Air Arabia, Air India Express, Biman Bngladesh Airlines, flydubai, Iran Air, 

    Nepal Airlines, Pakistan International Airlines, RAK Airways, Syrian Air and Yemen Airways) thirty 

    two (32) passenger flights daily. Qatar Airways will move to Concourse A by the end of this year.

3. Sharjah International Airport having handled seven and half (7.5) million passengers in 2012 is 

    working on a new master plan for the airport expansion by the end of this year and sign the 

    contract for the expansion.

4. GACA in Saudi Arabia is accelerating the building of a new modern world class airport at the 

    coastal city of Jazan to replace the existing airport.

On the other hand, it was announced that a new route linking Aqaba directly to Istanbul starting in April 2013 to boost tourism to Aqaba, Petra and Wadi Rum areas.