Gulf states creating "a new breed of full-service airlines"

22 Apr 2009 by Mark Caswell

Gulf carriers are set to "reshape the focus of the airline industry", according to Etihad Airways' chief executive James Hogan.

In a speech to the Aviation Club of Great Britain, Mr Hogan said carriers such as Etihad, Qatar and Emirates would benefit from markets unavailable to other airlines.

Hogan said an "increasing ability to win and retain first and business class travellers" would benefit the region's carriers.

"Until today, the first choice of many travellers to the Middle or Far East is to pick their national airline or one of the Asian ‘service brands'," said Hogan.

"That trend has started to shift - and the current downturn gives the Gulf carriers the chance to become the world's new ‘service brands' and reshape the sector."

Hogan said geographical location, segmented customer markets and strong investment in service relieved some of the pressure other carriers face in the current downturn.

"The Gulf region always had the opportunity to become a global hub, thanks to a number of factors," he said.

Hogan described the Gulf region as "the perfect bridge between East and West" with a "unique mix of markets".

"We have some additional segments - pilgrims and labour traffic being two of the most important - which other areas do not, as well as the Indian and Asian economies on our doorstep," he added.

"These factors combine to offer not just hundreds of millions of potential customers, but a segmented market which is comparatively well inoculated against the worst of the current downturn."

New equipment, facilities and infrastructure had allowed the Gulf States to create "a new breed of full service airlines" without worry of capacity constraints, aging equipment and high staff costs facing the European and North American legacy carriers, Hogan said.

He added: "Particularly in the age of the low-cost carrier, there is a massive sector of the market in which service is key. As new entrants, we have been able to start from scratch in creating our service offers and in creating our brands."

While the region's airlines are set to face tougher times than ever, Hogan predicted they would outperform other areas.

According to the International Air Transport Association (IATA), the Middle East was the only area to report a growth in traffic figures in February of 0.4 per cent. Globally the industry suffered from a 10.1 per cent decline year-on-year.

"The Gulf region is making the major contribution to those Middle East figures," said Hogan.

In January Gulf Air announced it was looking to serve new destinations in Europe and the east coast of America over the next few years. It also plans to increase capacity to India.

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Report by Andy Gough

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