Debate on additional slots for Gulf carriers

A number of countries, including Germany, Austria and Canada, refuse to provide additional route authority to carriers based in the Gulf, claiming that Gulf carriers unfairly compete with their national carriers, Lufthansa, Austrian and Air Canada. The fast-growing Gulf carriers, which operate state-of-the-art connecting hubs in the Middle East for traffic transiting from Asia to Europe or North America, believe they could provide significant economic benefits to both countries through additional flights. Has protectionism crept into the equation, or are Gulf-based carriers unfairly competing with those in Europe and North America? Complicating the picture are global airline alliances. There are three major airline alliances that operate in the world. Star Alliance 27 members include Air Canada, Lufthansa, Austrian, United, and Singapore Airlines. Oneworld's 15 present and future members include British Airways, Iberia, American, Cathay Pacific and Royal Jordanian, and SkyTeam includes Delta, Air France, KLM, Aeroflot, Korean, and will soon welcome Saudi Arabian Airlines and MEA. These alliances combine the marketing power and connecting networks of their airlines to offer seamless services virtually anywhere in the world. Emirates has steadfastly refused to join an alliance, and now cites itself as the fourth alternative for travellers via its global network headquartered in Dubai. Other Gulf carriers not members of an alliance include Etihad, Qatar and Gulf Air. Saudi Arabian, Royal Jordanian and MEA are already members or will soon be joining alliances, and within the Gulf Cooperation Council (GCC) strategic alignments are beginning to change. Those blocking new routes have cited government subsidisation of Gulf carriers on the one hand, while the Gulf carriers claim this is protectionism for legacy carriers that are unable to match the quality of service, convenience at modern new airports, and new aircraft. In examining the arguments, as with most disputes, the truth lies somewhere in between, beginning with the relative success and high growth for Gulf carriers. Part of the reason the Gulf carriers are so successful is location, ideally positioned between the fast growing markets in Asia and traditional markets in Europe. An example of this is Manchester, England, to Dubai, on which Emirates now uses the A380. While one would expect London to support an A380, Manchester seems an unlikely candidate to support such a large aircraft. In reality, few of its passengers have Dubai as a destination, with most travelling beyond to other destinations in Asia on the Emirates network. Three or four passengers to one destination, and six passengers to another destination, times the 50 to 100 different destinations, and one can quickly fill an A380. Emirates' chief competitor on Manchester-Dubai is really British Airways on Manchester-London, as passengers could choose either route to fly to their destinations. Given the differential in service, many will choose Emirates for long-haul travel on a more comfortable A380 rather than the hassle of a connecting flight in London. The second element is simply the quality of service and modern, new aircraft that have been introduced throughout the region. Qatar, Etihad, Emirates and other GCC carriers tend to have the latest models from Boeing and Airbus. The third element is modern new airports that simply outclass the older facilities at European airports. Skipping the notorious London Heathrow or Paris Charles de Gaulle has a lot of appeal to passengers. Are Gulf carriers subsidised to a greater degree than European carriers? Of course, any time a government owns an airline, even a partial share, the question of subsidies inevitably arises. The GCC carriers have become a force to be reckoned with worldwide, and their success is viewed by some as a zero sum game — what you gain must have been taken from us — rather than as creating a bigger pie from which we all benefit. That mistaken perception is pushing some decision-making into counterproductive actions, which may engender counterintuitive results.