An Overview of the Transformation and Expected Changes in the Middle East Airline Industry Over the past decade, considerable changes have taken place in the airline industry in the Middle East. The rapid expansion of three Gulf-based airlines and the development of three major airline hubs in the region have brought many new air services to these cities, while the growing route networks of these carriers have exerted a strong pressure on other established passenger-carrying airlines. throughout the eastern hemisphere. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Fifteen years ago, the airline market in the region was very different. A single airline, the state-owned Gulf Air, served as the national airline for Bahrain, Qatar, Abu Dhabi and Oman. It operated services to Europe, Asia, Africa and Oceania; however, lacking a central hub, it did not aim to serve passengers traveling between these regions, instead focusing on origin and destination traffic to the Middle East. Traffic between these continents was left to carriers depending on each end of the route. An example of this is the Kangaroo Route which refers to flights between Europe and Australia. Until the 2000s, the Kangaroo Route was dominated by Qantas and British Airways, which operated the flight with intermediate stops in South Asia (Schofield, 2012). These long point-to-point routes do not benefit from the efficiency and economies of scale that a central hub offers. In 1985, Emirates Airline began operations as a small carrier based in Dubai. This airline would eventually become a major rival to Gulf Air and spark the Middle East air travel boom (“Our History,” 2012). From 2002, the states invested in Gulf Air began to withdraw and create their own airlines with hubs in each's capital. By 2006, Gulf Air was fully controlled by Bahrain and Qatar Airways, Oman Air and Etihad Airways in Abu Dhabi had been established. Since the inception of these carriers, three of them have experienced dramatic growth through expansion of their route networks, fleet sizes and improvements to the airports in which they are based. These are Emirates, Etihad Airways and Qatar Airways and are now known as the Middle East Three or ME3. In this note, I will analyze the factors that enabled the expansion of the ME3 and attempt to determine the effect that the growth of these companies has had and will have on other air carriers.ResultsPart of the growth of the transportation market aviation in the Middle East can be attributed to trends affecting the industry globally. Long-haul airline tickets have plummeted over the past decade, making intercontinental travel accessible to more people. In the coach travel market, consumers have become more price sensitive and tend to opt for the lowest fare over other factors such as comfort or route. This led to the launch of many no-frills, full-service carriers. carriers to increase the number of seats and reduce free services in order to reduce ticket prices and compete better. On the other hand, in the air transport market ofpremium class, competition has focused on providing the most luxurious product in the sky (Smyth, 2008). The ME3s have outdone themselves by installing showers, private rooms, bars and even an entire apartment in their first class cabins. The introduction of code sharing and airline alliances has also allowed airlines to launch routes that may not have been profitable before. Code sharing allows passengers flying on one airline to seamlessly connect to a partner airline's flight and drives demand for flights between partner carrier hubs. ME3s all have extensive codeshare relationships with airlines around the world, allowing them to sell tickets to more destinations and operate more comprehensive flights ("What the", 2005). Qatar Airways is also a member of the Oneworld alliance, which allows them to share codes with all other member airlines, coordinate flight schedules and reciprocate frequent flyer benefits. Middle East Demography and GeographyThe demographic and economic changes in Middle Eastern countries have also caused demand. for air service in the region to grow, making possible the expansion of the Three Middle East countries. Gulf countries have experienced extreme population growth, largely due to immigration. Qatar's population has experienced an average annual growth of approximately fifteen percent over the past decade ("Population Growth", 2015), while the United Arab Emirates has experienced a growth rate of approximately fourteen percent. cent (“Demographic Profile”, 2011). The number of expatriate and migrant workers in the UAE and Qatar has also seen rapid growth over the past decade. Eighty-four percent of the UAE's population and ninety percent of its workforce are migrant workers, many of whom come from India, Bangladesh and Pakistan (Malit, 2013). This has spurred strong demand for flights between Gulf countries and the countries of origin of their workforce to serve workers starting and completing their contracts and returning home to visit family. There has also been strong economic growth in the Middle East. The UAE recorded an average GDP growth of 4.66 percent year-on-year over the past decade (“UAE,” 2015), while Qatar recorded an average growth of 3.81 percent year-on-year. cent (“Qatar GDP”, 2015). 2015). This economic prosperity has created a demand for skilled workers, particularly in the financial and banking sectors. The Dubai Economic Council even stated that “Dubai relies heavily on expatriates for its continued economic growth and development” (Al Awad, 2008). Many of these expatriate workers come from Europe, East Asia and North America. As companies open new offices in cities like Doha, Dubai and Abu Dhabi and send employees there to conduct business, many business trips are created to the Gulf region, allowing airlines to launch new routes and increase their capacity. other business centers. ME3s also have a geographic advantage. The hub cities of these carriers are located on or near the shortest route between Oceania and Europe and are centrally located in the Middle East region for connections to other cities in the region. They are also located halfway between Europe and South Asia. These geographic factors makeME3 an ideal location to handle connecting traffic between these regions using a hub-and-spoke model. Some examples are Air India, Kingfisher Airlines and Qantas. State-owned Air India has faced serious financial difficulties since it chose to "aggressively wet-lease aircraft to increase its market share" in 2006 and unsuccessfully merged with Indian Airlines in 2007, according to an aviation analyst (Manju, 2009). They have since significantly reduced the scope of their operations, eliminating routes and selling or leasing their long-haul planes to other carriers. The airline has sold five of its long-haul Boeing 777s to its Middle East rival Etihad Airways and is focusing on expanding its short-haul operations (“Air India”, 2013). Civil Aviation Minister Ajit Sing cited foreign competition as one of the reasons for the decision. problems saying: “The airline cannot be complacent because many new airlines are coming. The management and employees of Air India must perform or perish” (Phukan, 2013). Another, younger Indian airline, Kingfisher Airlines, effectively perished after experiencing a financial crisis resulting from its non-payment of income taxes and bankruptcy. The carrier, which was India's second largest by market share, permanently suspended all operations in 2012 ("Kingfisher Airlines", 2012). The downsizing of Air India and elimination of Kingfisher from the market presented itself as a great opportunity for ME3 carriers. Their hubs are geographically well positioned to serve traffic between India and points to the west and they are based in countries with large numbers of migrant workers to India. Qantas Airways has historically dominated the Oceania to Europe market with its famous Kangaroo Route; However, the airline's long-haul operations have recently generated significant losses, leading the airline to implement cost-cutting measures and begin a restructuring campaign. This has involved Qantas cutting 5,000 jobs, stopping flights to Europe, growing its low-cost subsidiaries and forming codeshare partnerships with other carriers to carry the airline's traffic. airline to Europe (“Qantas responds”, 2014). Middle East-based carriers have once again benefited from this airline's reduced services. They have hubs located on the straight between Australia and Europe and are capable of handling large amounts of connecting traffic between the regions. Qantas chose to abandon its former flagship London service in favor of routing passengers via Dubai on flights operated by codeshare partner Emirates (Leo, 2012). The future of expansion The future of the three Middle Eastern countries continues to be bright. All three carriers have orders pending for a significant number of long-haul wide-body aircraft. Qatar Airways has aircraft orders that will increase its fleet by more than 140% (“Our Fleet”). Emirates' fleet will grow by 130 percent and Etihad's by almost 200 percent over the next decade ("Our Fleet", 2015). All ME3 carriers operate the world's largest passenger aircraft, the 500-passenger Airbus A380. Emirates plans to operate a fleet of 140 of these aircraft and is already by far the largest operator of this aircraft type (“Our Fleet – The Emirates Experience”, 2015). Carriers plan to add new destinations to their route maps asAdditional capacity will be added to the fleet, with Qatar Airways opening at least four new cities over the next year. Etihad Airways has been particularly aggressive in growing through the acquisition of stakes in other carriers. Etihad acquired a 49% stake in troubled airlines Alitalia and Air Serbia, rebranded Switzerland-based Darwin Airlines as Etihad Regional to route traffic from smaller European cities to its Geneva-Abu Dhabi flights, and also owns significant holdings in Air Berlin, Air Seychelles, Virgin Australia, Jet Airways and Aer Lingus. The airline has launched what it calls the Etihad Equity Alliance, made up of all carriers in which the airline has significant investments (“Etihad Airways”, 2013). The airlines cooperate in the same way as those of the three major traditional airline alliances; coordinate schedules, launch co-branded marketing campaigns and enter into codeshare agreements. The home hubs of each of the ME3 carriers are also undergoing significant upgrades. Doha Airport, Qatar, was recently completely replaced to provide additional facilities for its main tenant, Qatar Airways and improve the passenger experience (“Hamad International”). Dubai International Airport, home to Emirates, is currently completing its expansion master plan with a new Concourse D and Terminal 2 expansion to be completed this year (Jain, 2011). Dubai has also opened a brand new airport called Al Maktoum International Airport. to which some smaller carriers moved, making way for Emirates' expansion at Dubai International Airport (Cohen, 2010). Abu Dhabi International Airport is also being expanded with two new runways and a brand new terminal complex to facilitate the growth of Etihad Airways (“Terminal Complex”, 2014). The expansion of these airports will allow the ME3 to further expand its operations, reduce congestion and make the hubs more attractive as connecting points for transiting passengers. Response from other carriers Naturally, the extreme growth of the air travel market in the Middle -East and the expansion of Gulf-based airlines have had an impact on other players in the global air transport market. This has led other air carriers to modify their operations accordingly. In order to compete with ME3, Turkish Airlines has expanded its hub operations in Istanbul to accommodate more connecting traffic. Also well placed to handle traffic from Europe to Asia, Turkish Airlines seeks to emulate the ME3 hub model in order to remain competitive (“Turkish Airlines”, 2013). The airline is also expanding its aircraft fleet, which is expected to grow by approximately seventy-five percent (“Turkish Airlines – Fleet,” 2014). Turkish Airlines is also promoting the construction of the new Istanbul Airport to enable the airline to further expand and reduce congestion at Atatürk Airport. The development of the Middle East air travel market by the ME3 and the demographic and economic expansion of the region have also led to the launch of several low-cost air carriers in the region, targeting more price-sensitive travelers and taking shorter routes. Air Arabia was founded in 2003 and operates from Sharjah, in an emirate not served by Etihad or Emirates. Profitable since its first year of operation, the airline's fleet and route network continues to grow. In closer competition with Dubai-based Emirates, low-cost airline flyDubai launched in..

Essay / An Overview of the Transformation and Expected Changes in the Middle East Airline Industry Over the past decade, considerable changes have taken place in the airline industry in the Middle East. The rapid expansion of three Gulf-based airlines and the development of three major airline hubs in the region have brought many new air services to these cities, while the growing route networks of these carriers have exerted a strong pressure on other established passenger-carrying airlines. throughout the eastern hemisphere. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Fifteen years ago, the airline market in the region was very different. A single airline, the state-owned Gulf Air, served as the national airline for Bahrain, Qatar, Abu Dhabi and Oman. It operated services to Europe, Asia, Africa and Oceania; however, lacking a central hub, it did not aim to serve passengers traveling between these regions, instead focusing on origin and destination traffic to the Middle East. Traffic between these continents was left to carriers depending on each end of the route. An example of this is the Kangaroo Route which refers to flights between Europe and Australia. Until the 2000s, the Kangaroo Route was dominated by Qantas and British Airways, which operated the flight with intermediate stops in South Asia (Schofield, 2012). These long point-to-point routes do not benefit from the efficiency and economies of scale that a central hub offers. In 1985, Emirates Airline began operations as a small carrier based in Dubai. This airline would eventually become a major rival to Gulf Air and spark the Middle East air travel boom (“Our History,” 2012). From 2002, the states invested in Gulf Air began to withdraw and create their own airlines with hubs in each's capital. By 2006, Gulf Air was fully controlled by Bahrain and Qatar Airways, Oman Air and Etihad Airways in Abu Dhabi had been established. Since the inception of these carriers, three of them have experienced dramatic growth through expansion of their route networks, fleet sizes and improvements to the airports in which they are based. These are Emirates, Etihad Airways and Qatar Airways and are now known as the Middle East Three or ME3. In this note, I will analyze the factors that enabled the expansion of the ME3 and attempt to determine the effect that the growth of these companies has had and will have on other air carriers.ResultsPart of the growth of the transportation market aviation in the Middle East can be attributed to trends affecting the industry globally. Long-haul airline tickets have plummeted over the past decade, making intercontinental travel accessible to more people. In the coach travel market, consumers have become more price sensitive and tend to opt for the lowest fare over other factors such as comfort or route. This led to the launch of many no-frills, full-service carriers. carriers to increase the number of seats and reduce free services in order to reduce ticket prices and compete better. On the other hand, in the air transport market ofpremium class, competition has focused on providing the most luxurious product in the sky (Smyth, 2008). The ME3s have outdone themselves by installing showers, private rooms, bars and even an entire apartment in their first class cabins. The introduction of code sharing and airline alliances has also allowed airlines to launch routes that may not have been profitable before. Code sharing allows passengers flying on one airline to seamlessly connect to a partner airline's flight and drives demand for flights between partner carrier hubs. ME3s all have extensive codeshare relationships with airlines around the world, allowing them to sell tickets to more destinations and operate more comprehensive flights ("What the", 2005). Qatar Airways is also a member of the Oneworld alliance, which allows them to share codes with all other member airlines, coordinate flight schedules and reciprocate frequent flyer benefits. Middle East Demography and GeographyThe demographic and economic changes in Middle Eastern countries have also caused demand. for air service in the region to grow, making possible the expansion of the Three Middle East countries. Gulf countries have experienced extreme population growth, largely due to immigration. Qatar's population has experienced an average annual growth of approximately fifteen percent over the past decade ("Population Growth", 2015), while the United Arab Emirates has experienced a growth rate of approximately fourteen percent. cent (“Demographic Profile”, 2011). The number of expatriate and migrant workers in the UAE and Qatar has also seen rapid growth over the past decade. Eighty-four percent of the UAE's population and ninety percent of its workforce are migrant workers, many of whom come from India, Bangladesh and Pakistan (Malit, 2013). This has spurred strong demand for flights between Gulf countries and the countries of origin of their workforce to serve workers starting and completing their contracts and returning home to visit family. There has also been strong economic growth in the Middle East. The UAE recorded an average GDP growth of 4.66 percent year-on-year over the past decade (“UAE,” 2015), while Qatar recorded an average growth of 3.81 percent year-on-year. cent (“Qatar GDP”, 2015). 2015). This economic prosperity has created a demand for skilled workers, particularly in the financial and banking sectors. The Dubai Economic Council even stated that “Dubai relies heavily on expatriates for its continued economic growth and development” (Al Awad, 2008). Many of these expatriate workers come from Europe, East Asia and North America. As companies open new offices in cities like Doha, Dubai and Abu Dhabi and send employees there to conduct business, many business trips are created to the Gulf region, allowing airlines to launch new routes and increase their capacity. other business centers. ME3s also have a geographic advantage. The hub cities of these carriers are located on or near the shortest route between Oceania and Europe and are centrally located in the Middle East region for connections to other cities in the region. They are also located halfway between Europe and South Asia. These geographic factors makeME3 an ideal location to handle connecting traffic between these regions using a hub-and-spoke model. Some examples are Air India, Kingfisher Airlines and Qantas. State-owned Air India has faced serious financial difficulties since it chose to "aggressively wet-lease aircraft to increase its market share" in 2006 and unsuccessfully merged with Indian Airlines in 2007, according to an aviation analyst (Manju, 2009). They have since significantly reduced the scope of their operations, eliminating routes and selling or leasing their long-haul planes to other carriers. The airline has sold five of its long-haul Boeing 777s to its Middle East rival Etihad Airways and is focusing on expanding its short-haul operations (“Air India”, 2013). Civil Aviation Minister Ajit Sing cited foreign competition as one of the reasons for the decision. problems saying: “The airline cannot be complacent because many new airlines are coming. The management and employees of Air India must perform or perish” (Phukan, 2013). Another, younger Indian airline, Kingfisher Airlines, effectively perished after experiencing a financial crisis resulting from its non-payment of income taxes and bankruptcy. The carrier, which was India's second largest by market share, permanently suspended all operations in 2012 ("Kingfisher Airlines", 2012). The downsizing of Air India and elimination of Kingfisher from the market presented itself as a great opportunity for ME3 carriers. Their hubs are geographically well positioned to serve traffic between India and points to the west and they are based in countries with large numbers of migrant workers to India. Qantas Airways has historically dominated the Oceania to Europe market with its famous Kangaroo Route; However, the airline's long-haul operations have recently generated significant losses, leading the airline to implement cost-cutting measures and begin a restructuring campaign. This has involved Qantas cutting 5,000 jobs, stopping flights to Europe, growing its low-cost subsidiaries and forming codeshare partnerships with other carriers to carry the airline's traffic. airline to Europe (“Qantas responds”, 2014). Middle East-based carriers have once again benefited from this airline's reduced services. They have hubs located on the straight between Australia and Europe and are capable of handling large amounts of connecting traffic between the regions. Qantas chose to abandon its former flagship London service in favor of routing passengers via Dubai on flights operated by codeshare partner Emirates (Leo, 2012). The future of expansion The future of the three Middle Eastern countries continues to be bright. All three carriers have orders pending for a significant number of long-haul wide-body aircraft. Qatar Airways has aircraft orders that will increase its fleet by more than 140% (“Our Fleet”). Emirates' fleet will grow by 130 percent and Etihad's by almost 200 percent over the next decade ("Our Fleet", 2015). All ME3 carriers operate the world's largest passenger aircraft, the 500-passenger Airbus A380. Emirates plans to operate a fleet of 140 of these aircraft and is already by far the largest operator of this aircraft type (“Our Fleet – The Emirates Experience”, 2015). Carriers plan to add new destinations to their route maps asAdditional capacity will be added to the fleet, with Qatar Airways opening at least four new cities over the next year. Etihad Airways has been particularly aggressive in growing through the acquisition of stakes in other carriers. Etihad acquired a 49% stake in troubled airlines Alitalia and Air Serbia, rebranded Switzerland-based Darwin Airlines as Etihad Regional to route traffic from smaller European cities to its Geneva-Abu Dhabi flights, and also owns significant holdings in Air Berlin, Air Seychelles, Virgin Australia, Jet Airways and Aer Lingus. The airline has launched what it calls the Etihad Equity Alliance, made up of all carriers in which the airline has significant investments (“Etihad Airways”, 2013). The airlines cooperate in the same way as those of the three major traditional airline alliances; coordinate schedules, launch co-branded marketing campaigns and enter into codeshare agreements. The home hubs of each of the ME3 carriers are also undergoing significant upgrades. Doha Airport, Qatar, was recently completely replaced to provide additional facilities for its main tenant, Qatar Airways and improve the passenger experience (“Hamad International”). Dubai International Airport, home to Emirates, is currently completing its expansion master plan with a new Concourse D and Terminal 2 expansion to be completed this year (Jain, 2011). Dubai has also opened a brand new airport called Al Maktoum International Airport. to which some smaller carriers moved, making way for Emirates' expansion at Dubai International Airport (Cohen, 2010). Abu Dhabi International Airport is also being expanded with two new runways and a brand new terminal complex to facilitate the growth of Etihad Airways (“Terminal Complex”, 2014). The expansion of these airports will allow the ME3 to further expand its operations, reduce congestion and make the hubs more attractive as connecting points for transiting passengers. Response from other carriers Naturally, the extreme growth of the air travel market in the Middle -East and the expansion of Gulf-based airlines have had an impact on other players in the global air transport market. This has led other air carriers to modify their operations accordingly. In order to compete with ME3, Turkish Airlines has expanded its hub operations in Istanbul to accommodate more connecting traffic. Also well placed to handle traffic from Europe to Asia, Turkish Airlines seeks to emulate the ME3 hub model in order to remain competitive (“Turkish Airlines”, 2013). The airline is also expanding its aircraft fleet, which is expected to grow by approximately seventy-five percent (“Turkish Airlines – Fleet,” 2014). Turkish Airlines is also promoting the construction of the new Istanbul Airport to enable the airline to further expand and reduce congestion at Atatürk Airport. The development of the Middle East air travel market by the ME3 and the demographic and economic expansion of the region have also led to the launch of several low-cost air carriers in the region, targeting more price-sensitive travelers and taking shorter routes. Air Arabia was founded in 2003 and operates from Sharjah, in an emirate not served by Etihad or Emirates. Profitable since its first year of operation, the airline's fleet and route network continues to grow. In closer competition with Dubai-based Emirates, low-cost airline flyDubai launched in..

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