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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