Correct, surely not: airlines in the Gulf now have to make choices: in the regional market for the transport of labour, price is the driver - the airline with the lowest fare from A to B gets the business irrespective of quality of service. However, for the transit business (Europe to Australasia, Europe to the Far East and Europe to South Africa), the quality of the service offered IS important, with cost secondary to a great extent.
EK is probably wise to think of setting up a lo-co regional option to tap a particular market segment. Emirates Express, anyone?