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The Economist on Gulf airlines taking over 4, June 2010

Posted by thegulfblog.com in Qatar, The Emirates.
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The economist has an excellent in-depth article on the three major Gulf airlines.Some highlights:

– Dubai’s T3 “will soon be the largest building in the world by floor space”

–  Dubai is current the the 3rd busiest airport in the world (23.s million passengers per year). Hong Kong International is second and Heathrow is first.

– Dubai is building a wholly new airport (who knew?). It’s costing $50 billion and will open in the early 2020s and be  “by far the biggest in the world”.

– Gulf Air used to be an airline for all the Trucial States and Qatar.

Saudi to enter Gulf aviation industry 18, April 2010

Posted by thegulfblog.com in Saudi Arabia, The Gulf.
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As if Middle Eastern skies were not full enough, Saudi Arabia has announced plans to become a “major international aviation hub by 2035”. These kinds of slightly bombastic statements have been heard before with the various launches and relaunches of Gulf Air, Emirates Airlines, Qatar Airways and with Etihad Airways.

Some interesting points to note:

  • Even though Saudi may well be undertaking a “comprehensive overhaul” it is a decade behind the regional curve. The afore mentioned airlines will be hundreds of aircraft, tens of billions of dollars worth of investments and numerous world-class airports ahead of Saudi Arabia. Saudi will not only not have the luxury of a relatively free international aviation market to grow into, but instead they will be seeking to grow as Emirates, Qatar and Etihad are maturing into ever more competitive, world-spanning airlines.
  • However, MEED sagely notes that Saudi will base their growth not as much on the frightfully competitive international market per se, but on domestic aviation (something no other GCC states can do) and on religious pilgrims.
  • This unique market will have to do for Saudi Arabia. I can not foresee how they could possibly compete with the established GCC and other carriers on Europe to Asia flights, barring an unsustainable and epically costly slashing of ticket prices. Without a positive aviation reputation and certainly without alcohol, such markets will prove, I believe, outwith their reach.
  • Saudi hopes that King Abdulaziz International in Jeddah will be one of the largest airports in the world handling 80 million passengers a year by 2035.

Emirates airlines Dubai PR 20, February 2010

Posted by thegulfblog.com in The Emirates.
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I’ve just arrived back in the Gulf thanks to Emirates Airlines. From London to Dubai I flew on one of their mammoth Airbus A380s. It’s really quite a plane and essentially the most comfortable long-ish haul flight that I’ve ever had. It was amusing to see their Dubai PR video as I came into land at DBX. Amid the usual glossy shots of the Burj Al Arab, the gaudiest hotel in the world, the desert, the Souq etc etc came the line:

Forget the credit crunch….Spend!!

fitting, no?

BA set for Christmas strike 14, December 2009

Posted by thegulfblog.com in UK.
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British Airways – ‘the world’s favourite airline’ – will, according to reports, vote in favour of a Christmas strike perhaps starting on the 21st December. They have a monumental hole in their pension pot as well as making an estimated £600 million loss this year and BA’s management have been seeking ways to cut costs. One of these has been through charging to reserve seats in advance and another has been reducing staffing costs. Indeed, the latter does not seem so unreasonable given that BA’s cabin crew earn almost twice as much as some of their rivals.

I really have no idea as to what BA needs to do. All I do unequivocally know is that having a strike at Christmas, with people flying home to their relatives, will erode BA’s name and customer base yet further and earn them vitriol and hate. They must not do this. If the London tube drivers want to strike (though I think it’s reprehensible given their pay) then but so be it: people will always have to take the tube. Need it be said that the same is utterly untrue for BA? With Emirates, Ethiad and Qatar airways buying billions and billions of dollars worth of new, beautifully comfortable planes and offering discounted ticket prices compared to BA’s overpriced tickets for old planes, (not to mention healthy European competition) striking would be, as far as I see it, more or less suicide.

I very much hope that I am reading this situation wrongly. For as average as BA are these days I nevertheless think it’s exceedingly important for Britain to retain a viable flagship carrier.

Update: Cabin crew have voted for a strike – 12 days (22nd December – 2nd January) affecting nearly 1 million passengers costing BA anywhere up to £80 million. Utter suicide.

Dubai police chief: ‘end sponsorship” 25, June 2009

Posted by thegulfblog.com in Bahrain, The Emirates.
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Dubai’s Chief of Police has called for the  ‘old’ and ‘outdated’ system of sponsorship that is responsible for the country’s legion of foreign workers to go. The kafala system, as it is known, is widely seen as one of the prime causes of the systematic abuses that are found with migrate workers throughout the Gulf. Under the current system workers are contractually as well as effectively tied to one employer whose job it is to hire workers from abroad, process their paperwork, arrange their accommodation and medical insurance. This has led to wide-spread abuses with employers seeking to cut costs where ever they can often to the detriment of living and pay conditions. Additionally, employers usually and illegally confiscate employees’ passports so can not move on.

The Chief’s comments do not come, however, from a humanitarian stand point. Indeed, he sees the current system as simply being a burden for Emirati employers. No changes are expected it the near future.

Bahrain was the first state that mooted changes to this system a month ago. However, the Bahrain business lobby soon set about reducing any changes to the bare minimum. It remains to be seen what, if any, changes will come out of the other end of this process.

The Emirate’s nuclear plans 25, November 2008

Posted by thegulfblog.com in Iran, The Emirates.
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The United Arab Emirates (UAE) will, according to an official, continue to work with the International Atomic Energy Agency (IAEA) over the creation its peaceful nuclear programme. The move to start negotiations over the possibility of the Emirates nuclear programme comes as electricity demand is expected to more than double by 2020 (from 15,000 megawatts to 42,000). This turn to nuclear power does sound, however, somewhat counterintuitive given that the Emirates (and especially Abu Dhabi) have such large oil and gas reserves. Furthermore, given that whenever Middle Eastern states begin discussing nuclear issues, it is often – rightly or wrongly – suggested that they have nefarious intentions, ought the UAE’s decision trouble the international community?

On the surface there seems to be no problem at all. The Emirates is a Western-orientated country with generally very good relations with the vast majority of countries in the world. They are reliant on various flows to and from the Western world, be in in the influx of Western tourism, Western educated skilled workers or Western companies along with their need of routes to sell their oil and gas, products and services as well as projects to invest in with their sovereign wealth funds. Their future, therefore, appears to be somewhat contingent on amicable and improving Western relations. Indeed, America and France, for example, both have military bases in the country and value the Emirates as a friendly nation in a critical region of the world and would, therefore, defend the Emirates to some degree. However, the question is to what degree? If, for a minute, the discussion can be taken along a more academic or even implausible route, when countries are faced with questions of existential importance, issues of status quo, trade and common ties become somewhat redundant. The only existential element that could possibly come into this equation is, of course, Iran.
Iran has been seeking to begin its own peaceful Nuclear programme for years now. The international community, however, do not believe Iran’s peaceful intentions and seemed determined to stop Iran from acquiring significant nuclear technology so that they could manufacture a weapon and thus deter the West from meaningful actions against it. However, it is not just the West that fears an Iranian nuclear power. Many of the Gulf states are somewhat perturbed by examples of bellicose rhetoric emanating from Tehran towards their favourable attitude towards the West generally and America specifically. Qatar and Bahrain arguably have the most to fear from an angry, nuclear powered Iran given that they host massive US military bases. Bahrain in particular has a huge Shia community which contributes to their nervousness. The Emirates too have a sizable Shia community as well as large natural resources that Iran might well be covetous of.

If Iran acquired a nuclear bomb, for example, it would be extraordinarily difficult for either the West or the Gulf states themselves to deter Iran from interfering explicitly or implicitly in their affairs, perhaps under the guise of safeguarding their Shia brethren. Furthermore, with Iran’s population reaching 100m in the coming years, its critical dependence on a high price of oil to maintain its budgetary needs (apparently Iran needs oil prices to be around $85 per barrel to break even), its weak and impoverished infrastructure, its large military, its problems with securing sufficient water resources and its difficult relations with both the West and some of its neighbours, the spectre of an un-deterrable Iran, coveting the vast wealth of the Gulf states could well have the Shaikhs and Emirs of the region scrabbling for the beginnings of a deterrent themselves.