Saturday, June 29, 2013

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. 

Wednesday, June 19, 2013

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.

Saturday, June 15, 2013

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. 


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