Economy

How Persian Gulf Airlines Surged To Top Class Of Travel Industry Pack

The sky's not even the limit for Persian Gulf airlines
The sky's not even the limit for Persian Gulf airlines
Tamara Muñoz

SANTIAGO - Last year in London, engineers from Airbus presented their vision for the future: An airplane featuring a transparent roof that allows passengers to see the stars, with an air system that pumps antioxidants into the cabin air.

If this audacious concept becomes reality in 2050 and the airline market remains more or less the same, then it is probable that the Persian Gulf airlines will be the first to operate these antioxidant-pumped planes.

“The region is key to meeting the challenges in aviation and to finding positive elements,” said James Hogan, CEO of Etihad Airways, from the United Arab Emirates (UAE).

Supported by their governments, petrodollars and key state-of-the-art airports in Doha in Qatar; Dubai and Abu Dhabi in the UAE, Persian Gulf airlines have burst into the aviation big leagues over the past couple years.

The reasons are varied, but the main ones are the region’s acquisition power, value added services and first-class airport infrastructure. “The hubs have been key, since the convenience of direct flights in modern airplanes is nicer for passengers,” explains Javier Reynoso, a professor at EGADE Business School in Mexico.

Let’s take the case of Dubai, home of the eccentric Burj Al Arab hotel, the fourth-largest airport in the world and one of the most famous airlines for customer service. “The UAE have understood the importance of aviation, which is why the governments have pushed an integrated transportation vision,” explains Ricardo Delpiano, a consultant with Business Development Vortexx.

This has translated to airlines like Qatar Airways, Emirates and Etihad -- also know as the “Sheiks of the air.” These airlines have managed to revolutionize the image of air travel, creating a unique service through luxury. According to experts, one of the elements that explains these airlines success is that these companies offer personalized service that starts at check-in and goes until check-out. “That personalized attention is exactly what guarantees passenger loyalty,” says Maximo Gainza, an analyst with Ascend Worldwide.

For passengers who decide to fly with the Gulf airlines, the price is not of primary concern. “The most important thing is the added value. Whenever there is a service that goes above and beyond expectations there are customers who are willing to pay for it,” says Maria Eugenia Giron, a professor at IE Business School with experience in the luxury industry.

The luxury that these airlines have is almost unimaginable. Emirates Airlines has furniture made out of expensive wood and accented with gold (yes, real gold), sofas that turn into beds with the press of a button and meals prepared by internationally renowned chefs. Ground service includes a limousine transfer with a personal chauffeur.

Behind the take-off

Of the three companies, Emirates is the largest and the oldest, with 407 destinations and a fleet of 191 planes. They have the largest fleet of Airbus 380 planes in the world, and just in 2012 they invested another $3.8 billion in two new Airbus 380s, 10 Boeing 777 and a cargo plane. The company’s CEO is the uncle of the president of the Department of Aviation in the UAE.

Qatar Airways has a slightly smaller fleet, with only 116 planes, all equally modern but somewhat smaller planes. The third major Persian Gulf airline, Etihad Airways, is the only of the three that does not have a local CEO. In 2006, three years after the airline was founded, Australian James Hogan took over as CEO and he has seen the airline through an intense period of growth.

It is also interesting to see what sort of branding the three airlines have been doing. Emirates’ logo graces the jerseys of the London Arsenal soccer team, while Etihad sponsors Manchester City and Qatar chose Barcelona for its soccer sponsorship.

The future


In total, the three “sheiks” transported more than 58 million passengers in the last fiscal year. The latest numbers also show double-digit growth in passenger volume, from 30% growth for Qatar Airways to 17% growth for Etihad.

The sheiks’ presence in Latin America is new. Emirates started flying to Latin America in 2007 and now has direct flights to Sao Paulo and another to Buenos Aires with a stop-over in Rio de Janeiro. Qatar Airways has been in Buenos Aires and Sao Paulo since 2010. Etihad plans to come to the region in 2012. “That is important, since in the region one of the biggest growth sectors is the luxury experience market, which includes luxury travel,” says Joel Muniz, partner and managing director of the Boston Consulting Group.

Although they have traditionally shied away from alliances, now the sheiks are open to working with Latin American companies. Emirates Airlines is negotiating an alliance with Qantas, while Etihad is trying to become a majority shareholder in Air Berlin or Alitalia, both of which are in precarious financial situations. Last October the CEO of Qatar Airways announced that his company would become part of the One World Alliance.

The history of aviation in the Gulf also has some stories of failure, but for the moment none of the analysts think the three sheiks are in any danger. Quite the contrary: These three companies could become serious competition for companies like Air France, British Airways and Lufthansa. So if in 2050 the star-gazing Airbus really does take off from Frankfurt, its destination might not be New York or Tokyo, but one of the futuristic capitals of the Persian Gulf.

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Protests against gasoline price hikes in Lebanon

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Wai!*

Welcome to Thursday, where leaked documents show how some countries are lobbying to change a key report on climate change, Moscow announces new full lockdown and the world's first robot artist is arrested over spying allegations. Meanwhile, German daily Die Welt looks at the rapprochement between two leaders currently at odds with Europe: UK's BoJo and Turkey's Erdogan.

[*Bodo - India, Nepal and Bengal]


🌎  7 THINGS TO KNOW RIGHT NOW

• Documents reveal countries lobbying against climate action: Leaked documents have revealed that some of the world's biggest fossil fuel and meat producing countries, including Australia, Japan and Saudi Arabia, are trying to water down a UN scientific report on climate change and pushing back on its recommendations for action, less than one month before the COP26 climate summit.

• COVID update: The city of Moscow plans to reintroduce lockdown measures next week, closing nearly all shops, bars and restaurants, after Russian President Vladimir Putin announced a nationwide seven-day workplace shutdown from Oct. 30 to combat the country's record surge in coronavirus cases and deaths. Meanwhile, India has crossed the 1 billion vaccinations milestone.

• India and Nepal floods death toll passes 180: Devastating floods in Nepal and the two Indian states of Uttarakhand and Kerala have killed at least 180 people, following record-breaking rainfall.

• Barbados elects first ever president: Governor general Dame Sandra Mason has been elected as Barbados' first president as the Caribbean island prepares to become a republic after voting to remove Queen Elizabeth II as head of state.

• Trump to launch social media platform: After being banned from several social media platforms including Facebook and Twitter, former U.S. President Donald Trump announced he would launch his own app called TRUTH Social in a bid "to fight back against Big Tech." The app is scheduled for release early next year.

• Human remains found in hunt for Gabby Petito's fiance: Suspected human remains and items belonging to Brian Laundrie were found in a Florida park, more than one month after his disappearance. Laundrie was a person of interest in the murder of his fiancee Gabby Petito, who was found dead by strangulation last month.

• Artist robot detained in Egypt over spying fear: Ai-Da, the world's ultra-realistic robot artist, was detained for 10 days by authorities in Egypt where it was due to present its latest art works, over fears the robot was part of an espionage plot. Ai-Da was eventually cleared through customs, hours before the exhibition was due to start.

🗞️  FRONT PAGE

"Nine crimes and a tragedy," titles Brazilian daily Extra, after a report from Brazil's Senate concluded that President Jair Bolsonaro and his government had failed to act quickly to stop the deadly coronavirus pandemic, accusing them of crimes against humanity.


📰  STORY OF THE DAY

Erdogan and Boris Johnson: A new global power duo?

As Turkey fears the EU closing ranks over defense, Turkish President Erdogan is looking to Boris Johnson as a post-Brexit ally, especially as Angela Merkel steps aside. This could undermine the deal where Ankara limits refugee entry into Europe, and other dossiers too, write Carolina Drüten and Gregor Schwung in German daily Die Welt.

🇹🇷🇬🇧 According to the Elysée Palace, the French presidency "can't understand" why Turkey would overreact, since the defense pact that France recently signed in Paris with Greece is not aimed at Ankara. Although Paris denies this, it is difficult to see the agreement as anything other than a message, perhaps even a provocation, targeted at Turkey. The country has long felt left out in the cold, at odds with the European Union over a number of issues. Yet now President Recep Tayyip Erdogan is setting his sights on another country, which also wants to become more independent from Europe: the UK.

⚠️ Outgoing German Chancellor Angela Merkel always argued for closer collaboration with Turkey. She never supported French President Emmanuel Macron's ideas about greater strategic autonomy for countries within the EU. But now that she's leaving office, Macron is keen to make the most of the power vacuum Merkel will leave behind. The prospect of France's growing influence is "not especially good news for Turkey," says Ian Lesser, vice president of the think tank German Marshall Fund.

🤝 At the UN summit in September, Erdogan had a meeting with British Prime Minister Boris Johnson at the recently opened Turkish House in New York. Kalin says it was a "very good meeting" and that the two countries are "closely allied strategic partners." He says they plan to work together more closely on trade, but with a particular focus on defense. The groundwork for collaboration was already in place. Britain consistently supported Turkey's ambition to join the EU, and gave an ultimate proof of friendship after the failed coup in 2016.


➡️ Read more on Worldcrunch.com

📣 VERBATIM

"He has fought tirelessly against the corruption of Vladimir Putin's regime. This cost him his liberty and nearly his life."

— David Sassoli, president of the European Parliament, wrote on Twitter, following the announcement that imprisoned Russian opposition leader Alexei Navalny was awarded the 2021 Sakharov Prize for Freedom of Thought, the European Union's highest tribute to human rights defenders. Navalny, who survived a poisoning that he blames on the Kremlin, is praised for his "immense personal bravery" in fighting Putin's regime. The European Parliament called for his immediate release from jail, as Russian authorities opened a new criminal case against the activist that could see him stay in jail for another decade.

💬  LEXICON

魷魚的勝利

Chinese video platform Youku is under fire after announcing it is launching a new variety show called in Mandarin Squid's Victory (Yóuyú de shènglì) on social media, through a poster that also bears striking similarities with the visual identity of Netflix's current South Korean hit series Squid Game. Youku apologized by saying it was just a "draft" poster.

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Anyone want to guess Trump's first post on his upcoming social media platform...? Let us know how the news look in your corner of the world — drop us a note at info@worldcrunch.com!

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