ddd
11th May 2008, 08:41
Hard decisions in the making
The Middle East region has some tough decisions to make. These will decide the course of aviation for the next twenty years. It is a time for great challenges and also great risks. The weak and the protected are more than likely to fall by the wayside, turned into marginal players by the power blocs that are more commonly known as alliances. Those who depend on their governments for bailing them out of financial corners will discover they have been bypassed or simply hung out to dry. For the region the single most important aspect is to come together with a certain sense of cohesion and understanding that serves that common purpose. Even though there is a new century upon it, the region’s attitude of ‘going it alone’ at one another’s cost rather engaging in cost cutting co-operative ventures continues to prevail.
Against this canvas how will the region establish its identity and become a power to reckon with.
The region has the money. It has the mobility. It even boasts a strong infrastructure reflected in airports at Dubai, Abu Dhabi, Jeddah, Riyadh, Bahrain, Muscat, Doha in the Gulf countries and a reasonable standard for terminals in Jordan, Syria, Lebanon and Cairo in Africa. The aircraft are state of the art and the intent to spearhead pioneering aviation developments has been manifested for years.
Then what are the fears?
In capsule, the absence of ‘oneness’ that comes out and sends a message which is not conducive to the promise that is held out. The reluctance to examine the call of mega alliances, to privatise both airports and airlines and dissolve the national flag aspect, the slowness with which Open Skies is being reviewed, these form the larger canvas vis a vis the progress being registered by the rest of the world.
Even within its sphere there is no appreciable movement to create markets for the future. If it does isolate itself from the main field the region has to recognize the fact that it must discover its own markets. These have to be discovered or energized. It can only be done by common dictate and a tacit encouragement for travelers for tourism and business to come to these parts.
The need to streamline procedures, to remove or simplify visa requirements and inducements for travel are mandatory. Even more important there is a need to encourage regional alliances so that passengers can move within the enclave on different airlines without having to often backtrack on routes and spend as much as 100 per cent more flying time to reach their destinations.
Not just that, but there are also limited options and impulse fliers often find themselves cooling their heels for seven to eight hours to take a 45 minute flight because their tickets are not valid on other carriers and cannot be endorsed. It is difficult to find merit in this situation and there is a need for the aviation authorities to work out a blueprint before it is left behind as the only cluster which is out of synch with what is happening in the rest of the world. Because of such prevailing conditions passengers have to travel east by first west since the route is predicated by the airline ticket they have chosen to purchase. As a result of this flawed logic the ticket costs are also very high with service in First and business class often the cost of an excursion ticket to London.
Measure these conditions against the global standards and one understands the need to create a collective image rather than a splintered one. Unless protectionism gives way to healthy competition and co-operation the risk of being sidelined increases. What is most needed is to acknowledge the fact that competition and co-operation are possible simultaneously and do not offer contradiction and then working towards it.
The industry is strongly cyclical. At the present moment in its current cycle it is on the upswing but this has to be followed by a peak period and then a comparative slump as the industry’s elements consolidate. The first signs of aircraft sales evening out can already be registered. This is natural and affords the carriers to settle down with their new purchases and make optimum use of them. Economic cycles are important, but the present mood seems to indicate that air travel is more sensitive to consumer confidence. In America and Europe, consumer confidence is high and remains constant but is not rising.. This suggests that recent excellent air travel growth may be flattening. For countries in Asia recovering from recessions, confidence is rising from low values. This rise should anticipate a return of airline revenues to levels seen before the crises and that will automatically reduce the numbers in the planes. In China and South America, it is likely that confidence is not strong, and travel growth may be somewhat in abeyance in the short term.
For the Middle East and Gulf, centered ideally between the west and the east and offering the perfect stopovers there are certain other considerations that go into account. Peace in the region and a solution of the Palestine issue will make a positive impact and galvanise the region’s aviation industry. Although the GCC region has strengthened its selective tourism base and offers multiple options for conferences, corporate conventions and sports holidays at al levels it has to ensure that it creates long haul options out of the region rather than be satisfied with the stopover image.
At present much of the slack is being taken in by the subcontinental workforces that are on lease to these countries. This flow is now being sharply curtailed and can no longer be seen as the future’s revenue earner. Alternatives shall have to be discovered and also nurtured.
The Middle East region has some tough decisions to make. These will decide the course of aviation for the next twenty years. It is a time for great challenges and also great risks. The weak and the protected are more than likely to fall by the wayside, turned into marginal players by the power blocs that are more commonly known as alliances. Those who depend on their governments for bailing them out of financial corners will discover they have been bypassed or simply hung out to dry. For the region the single most important aspect is to come together with a certain sense of cohesion and understanding that serves that common purpose. Even though there is a new century upon it, the region’s attitude of ‘going it alone’ at one another’s cost rather engaging in cost cutting co-operative ventures continues to prevail.
Against this canvas how will the region establish its identity and become a power to reckon with.
The region has the money. It has the mobility. It even boasts a strong infrastructure reflected in airports at Dubai, Abu Dhabi, Jeddah, Riyadh, Bahrain, Muscat, Doha in the Gulf countries and a reasonable standard for terminals in Jordan, Syria, Lebanon and Cairo in Africa. The aircraft are state of the art and the intent to spearhead pioneering aviation developments has been manifested for years.
Then what are the fears?
In capsule, the absence of ‘oneness’ that comes out and sends a message which is not conducive to the promise that is held out. The reluctance to examine the call of mega alliances, to privatise both airports and airlines and dissolve the national flag aspect, the slowness with which Open Skies is being reviewed, these form the larger canvas vis a vis the progress being registered by the rest of the world.
Even within its sphere there is no appreciable movement to create markets for the future. If it does isolate itself from the main field the region has to recognize the fact that it must discover its own markets. These have to be discovered or energized. It can only be done by common dictate and a tacit encouragement for travelers for tourism and business to come to these parts.
The need to streamline procedures, to remove or simplify visa requirements and inducements for travel are mandatory. Even more important there is a need to encourage regional alliances so that passengers can move within the enclave on different airlines without having to often backtrack on routes and spend as much as 100 per cent more flying time to reach their destinations.
Not just that, but there are also limited options and impulse fliers often find themselves cooling their heels for seven to eight hours to take a 45 minute flight because their tickets are not valid on other carriers and cannot be endorsed. It is difficult to find merit in this situation and there is a need for the aviation authorities to work out a blueprint before it is left behind as the only cluster which is out of synch with what is happening in the rest of the world. Because of such prevailing conditions passengers have to travel east by first west since the route is predicated by the airline ticket they have chosen to purchase. As a result of this flawed logic the ticket costs are also very high with service in First and business class often the cost of an excursion ticket to London.
Measure these conditions against the global standards and one understands the need to create a collective image rather than a splintered one. Unless protectionism gives way to healthy competition and co-operation the risk of being sidelined increases. What is most needed is to acknowledge the fact that competition and co-operation are possible simultaneously and do not offer contradiction and then working towards it.
The industry is strongly cyclical. At the present moment in its current cycle it is on the upswing but this has to be followed by a peak period and then a comparative slump as the industry’s elements consolidate. The first signs of aircraft sales evening out can already be registered. This is natural and affords the carriers to settle down with their new purchases and make optimum use of them. Economic cycles are important, but the present mood seems to indicate that air travel is more sensitive to consumer confidence. In America and Europe, consumer confidence is high and remains constant but is not rising.. This suggests that recent excellent air travel growth may be flattening. For countries in Asia recovering from recessions, confidence is rising from low values. This rise should anticipate a return of airline revenues to levels seen before the crises and that will automatically reduce the numbers in the planes. In China and South America, it is likely that confidence is not strong, and travel growth may be somewhat in abeyance in the short term.
For the Middle East and Gulf, centered ideally between the west and the east and offering the perfect stopovers there are certain other considerations that go into account. Peace in the region and a solution of the Palestine issue will make a positive impact and galvanise the region’s aviation industry. Although the GCC region has strengthened its selective tourism base and offers multiple options for conferences, corporate conventions and sports holidays at al levels it has to ensure that it creates long haul options out of the region rather than be satisfied with the stopover image.
At present much of the slack is being taken in by the subcontinental workforces that are on lease to these countries. This flow is now being sharply curtailed and can no longer be seen as the future’s revenue earner. Alternatives shall have to be discovered and also nurtured.