freightdog188
10th Feb 2010, 08:01
Change the record
by Ed Attwood
In an interview with Arabian Business this week, Cathay Pacific CEO Tony Tyler lambasted fast-growing Gulf-based carriers for their poor service culture and hinted that the amount of awards they win are based on the size of their advertising budgets.
Strong words indeed. But it’s been a brutal couple of years for Asia-Pacific carriers, which encompass a large share of the world’s traffic. Last month, Japan Airlines (JAL) filed the country’s largest ever bankruptcy petition by a non-financial company. Korean Airlines posted a loss of $1.7 billion in 2008, although latest-quarter results showed a return to profit. Cathay itself suffered a disastrous slide in yields during 2008, although, again, Tyler feels more confident about 2010.
From the service perspective, the Cathay Pacific boss’ criticisms don’t really add up. He pointed to the independent Skytrax awards - where the Hong Kong airline won the overall prize last year – as being far more pertinent than magazine awards. Yet in the same ceremony, both Emirates and Qatar Airways were higher than Cathay in the Best First Class Airline award. Furthermore, Etihad won the Best Business Class award category, and Qatar Airways walked off with the Best Economy Class prize. Clearly Skytrax didn’t feel that there was much of a ‘generation gap’ in service there.
Of course, the Cathay Pacific CEO is not alone in his feelings about Emirates, Etihad and Qatar Airways. For example, Lufthansa has long harboured a grudge over what it calls “an imbalance” between the German and UAE markets, given that Emirates flies at high frequencies to Hamburg, Dusseldorf, Frankfurt and Munich, and is looking at adding Berlin and Stuttgart. In return, Lufthansa only flies from its hubs at Frankfurt and Munich to the UAE.
Related: Gulf carriers ‘generation behind’ Cathay on service
Story continues below ↓
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But all that is hardly Emirates’ fault – particularly as it’s the German government that decides the landing rights. And the Gulf carriers can rightly point out that their bulging order books for Airbus jets – part manufactured in Germany – are putting billions of euros back into the European country’s economy.
The real issue is the threat that Emirates et al pose to long-haul flights between Europe and Asia, and between west and subcontinental Asia and the US. In the February edition of Open Sky, Emirates’ public affairs journal, the Dubai carrier published a powerpoint slide produced by the Star Alliance team – which is headed by Lufthansa – entitled “How Can We React To The EK Threat?” The slide had a number of headings, included ‘lobby with governments’, ‘try to prove state subsidies’, ‘stop DXB [Dubai] services’ and, finally, ‘stop filling their planes’.
The fact is that older carriers are ever more worried than ever about the impact of the Gulf airlines on their own bottom line. Emirates may have seen its profits drop by 80 percent in its last full-year results, but the real news was that the airline still made a profit in a year when other carriers were losing billions. However much Lufthansa, Cathay Pacific and the rest may seek to carp at their Middle Eastern rivals, the Gulf airlines actually saw their market share grow during the worst year the aviation industry has ever seen. No amount of media mudslinging is going to change that.
© arabianbusiness.com 10 Feb 2010
by Ed Attwood
In an interview with Arabian Business this week, Cathay Pacific CEO Tony Tyler lambasted fast-growing Gulf-based carriers for their poor service culture and hinted that the amount of awards they win are based on the size of their advertising budgets.
Strong words indeed. But it’s been a brutal couple of years for Asia-Pacific carriers, which encompass a large share of the world’s traffic. Last month, Japan Airlines (JAL) filed the country’s largest ever bankruptcy petition by a non-financial company. Korean Airlines posted a loss of $1.7 billion in 2008, although latest-quarter results showed a return to profit. Cathay itself suffered a disastrous slide in yields during 2008, although, again, Tyler feels more confident about 2010.
From the service perspective, the Cathay Pacific boss’ criticisms don’t really add up. He pointed to the independent Skytrax awards - where the Hong Kong airline won the overall prize last year – as being far more pertinent than magazine awards. Yet in the same ceremony, both Emirates and Qatar Airways were higher than Cathay in the Best First Class Airline award. Furthermore, Etihad won the Best Business Class award category, and Qatar Airways walked off with the Best Economy Class prize. Clearly Skytrax didn’t feel that there was much of a ‘generation gap’ in service there.
Of course, the Cathay Pacific CEO is not alone in his feelings about Emirates, Etihad and Qatar Airways. For example, Lufthansa has long harboured a grudge over what it calls “an imbalance” between the German and UAE markets, given that Emirates flies at high frequencies to Hamburg, Dusseldorf, Frankfurt and Munich, and is looking at adding Berlin and Stuttgart. In return, Lufthansa only flies from its hubs at Frankfurt and Munich to the UAE.
Related: Gulf carriers ‘generation behind’ Cathay on service
Story continues below ↓
advertisement
But all that is hardly Emirates’ fault – particularly as it’s the German government that decides the landing rights. And the Gulf carriers can rightly point out that their bulging order books for Airbus jets – part manufactured in Germany – are putting billions of euros back into the European country’s economy.
The real issue is the threat that Emirates et al pose to long-haul flights between Europe and Asia, and between west and subcontinental Asia and the US. In the February edition of Open Sky, Emirates’ public affairs journal, the Dubai carrier published a powerpoint slide produced by the Star Alliance team – which is headed by Lufthansa – entitled “How Can We React To The EK Threat?” The slide had a number of headings, included ‘lobby with governments’, ‘try to prove state subsidies’, ‘stop DXB [Dubai] services’ and, finally, ‘stop filling their planes’.
The fact is that older carriers are ever more worried than ever about the impact of the Gulf airlines on their own bottom line. Emirates may have seen its profits drop by 80 percent in its last full-year results, but the real news was that the airline still made a profit in a year when other carriers were losing billions. However much Lufthansa, Cathay Pacific and the rest may seek to carp at their Middle Eastern rivals, the Gulf airlines actually saw their market share grow during the worst year the aviation industry has ever seen. No amount of media mudslinging is going to change that.
© arabianbusiness.com 10 Feb 2010