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Gulf giants bite the global pie

Booming Gulf Airlines

Not enough carbon emission tax in the world can be a hindrance to the booming carriers of the Gulf, backed by wealthy backgrounds and ambition

August 2, 2012 8:00 by

While many global airlines are declaring bankruptcy or slowly succumbing to the slow decay of high costs, carbon taxes and low flight demand, there is no doubt that the booming airlines of the Gulf are soaring miles above the bar. Qantas, for instance, the Australian airline falling through the cracks has found its savior through an alliance partnership with Emirates Airline, a Dubai based aviation giant. Although, recently the Dubai carrier announced that the partnership will not include merging of the revenue stream.

Emirates Airlines is looked upon as one of the most prestigious, even on a global scale. Qatar Airways has been named the world’s best airline by Skytrax two years in a row and Etihad Airways is busy biting chunks of the global pie by focusing less on plane purchases and more on airline purchases.

Since December, Etihad has bought stakes in four different carriers, subsequently creating speculation of further take overs by the Gulf giants. The booming airlines of the Gulf are taking over as they not only continue to weekly expand their flight routes but expanding their fleets with fuel-efficient aircrafts as well.

While Qantas remains in alliance talks with Emirates Airlines, Etihad Airways announced a codeshare deal earlier this week with Aer Lingus merely months after they purchased a slice of the Irish airline. There were speculations about a tie up with Air India until Etihad put the rumours to rest. They were also recently given the green light from the Australian government to increase their stake in Virgin Australia, Qantas’ national rival, to 10 percent.

In addition to its Virgin Australia and Aer Lingus stakes, Etihad owns nearly 30 percent of Germany’s second-biggest airline, Air Berlin, and 40 percent of Air Seychelles, the island country’s national carrier.

Gulf Airlines continue to earn more landing rights all over the world as they reveal their power and ability to meet global travel demands. Qatar Airways and Air Canada had an unpleasant encounter when the Canadian carrier appealed to its government to reduce Qatar Airways’ landing rights less they risk going bankrupt in the process. They argued that the government should support their local carrier by not cutting off most of its business demands while the CEO of Qatar Airways, famously known for his bold statements, implied that Air Canada ‘should go to hell’.

The Doha based carrier last year bought more than a third of European freight airline Cargolux and has made plans to launch a new carrier to serve next-door Saudi Arabia’s domestic market.

While Emirates Airlines generally points its focus towards internal expansion that has not stopped it from initating or following up with beneficial partnerships and networks. “We routinely look at ways we can work with other airlines in order to offer customers the most convenient and seamless service possible,” Emirates said in a written statement quoted by Bloomberg’s Business Week.

The Gulf based carriers are expanding at an alarming rate, their networks widening and their fleet multiplying. They come from a wealthy background and the support of their states. The common denominator appears to be that if a demand exists and can be filled, why not meet it first?

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