More Articles | Home | - offers calling cards with great domestic and international rates. Sign up now and get 10% off instantly.

Mourad Teyeb 

The Gulf: Trouble in the Air
Mourad Teyeb 

Click on the thumbnail images to display an enlargement.

The Gulf has too many airlines, too many airports, and not enough passengers. It’s a recipe for ruin.

The past 40 years have seen that bumpy desert airstrip in Dubai – with a small hut serving as its arrivals and departure hall – go through a process of almost non-stop expansion. Today, with two giant runways and state-of-the-art terminals, Dubai airport handles 12 million passengers a year: it is the busiest airport in the Gulf, a region which has witnessed a boom in air travel.

Travel to Dubai or the other major airports in the Gulf and, at any hour of the day or night, you will see airliners from the four corners of the world 
boarding and offloading passengers. At the same time, it is not unusual to see planes from up to six Gulf-based airlines which are plying routes inside 
the region and beyond. 

The airports of the Gulf, then, are not only magnets for international carriers but are also frequent ports of call for the growing number of regional carriers – begging a series of questions about how these carriers have emerged and what their futures might be in a very crowded and competitive market. 

The lower Gulf was a late starter as far as air services were concerned – regular flights began only when oil was found in commercial quantities in the 1960s and 1970s. During the same period, though, the aviation industry was already well established elsewhere in the Gulf. 

In the late 1940s, a British pilot, Freddie Bosworth, arrived in Bahrain in an ex-Royal Air Force twin-engined Anson. He began ferrying passengers to Doha and Dhahran and in 1950, in partnership with local businessmen, he registered Gulf Aviation as a private share-holding company. 

British Overseas Airways Corporation (BOAC – the forerunner of British Airways) later became a shareholder. In 1971, the governments of Bahrain, Qatar, Abu Dhabi and Oman bought out BOAC and the airline became, as it is known today, Gulf Air. After the war. 

Kuwait Airways is another regional airline that traces its history back to the emergence of the oil industry in the late 1940s, beginning services with a single DC-3 Dakota, before expanding its fleet with the introduction of the turbo-prop Vickers Viscount. 

Saudi Arabian Airlines also began operations after World War II with a Dakota – a gift to King Abdul Aziz from President Franklin D. Roosevelt of the United States. 

By the 1970s, all the airlines of the Gulf were modernizing their fleets, introducing jets on internal and international routes. This was also the era of rocketing oil prices. In the spending boom that accompanied it, new airports sprung up in every city. The United Arab Emirates boasted fully equipped airports at Abu Dhabi, Dubai and Sharjah – little more than a stone’s throw from one another. But air services in the lower Gulf – with the carriers of Kuwait and Saudi Arabia expanding on their own – continued to be focused on Gulf Air, based at Muharraq airport in Bahrain which had been developed as an RAF base and was the undisputed regional hub in those days. 

The formation of the Gulf Cooperation Council (GCC), comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, seemed to offer even greater promise for regional cooperation and consolidation of air services. But it was not to be. In a matter of years, the three existing Gulf airlines were joined by three more: Emirates Airlines (based in Dubai), Oman Air and Qatar Airways. All are competing for passengers on intra-Gulf routes, and all are offering services further afield. At the same time, the airlines of the Gulf are undergoing major changes. In October, Saudi Arabian Airlines (Saudia) announced that it had mandated a consortium led by BNP Paribas to act as advisers on the privatization of the airline. 

Saudia, with a fleet of 126 aircraft serving 25 domestic airports and 50 international destinations, has become one of the major world airlines. But with a workforce of 25,000 and highly subsidized internal fares, the airline has not been able to make a profit, leaving some aviation experts in the Gulf wondering how attractive a proposition it will be for private investors. 

Qatar Airways, founded in 1995 and with 50 percent government ownership, has attracted headlines recently with a major fleet expansion program. Not only has the carrier ordered six new Airbus A320 aircraft, but it has also led the world by ordering two new Airbus Corporate Jets – an aircraft configured with only 36 first-class seats, intended for premium international business travel. The order attracted the attention of the prestigious industry weekly publication Flight International, which said that Qatar Airways might be setting “a new travel pattern in air transport”. 

Of the newcomers in the Gulf, the best known is Emirates Airlines, which has won several international awards for its high standards of passenger service. Emirates has also whetted the appetites of the plane manufacturers, signing a multi-million dollar contract at the Farnborough Air Show in Britain last September for five Airbus A3XX super jumbo airliners, with the option to buy five more. Emirates posted profits last year of around $87 million. But aviation sources in the Gulf question how much the airline is being subsidized by the emirate of Dubai. “Emirates is Dubai,” insisted one UAE travel operator. “It exists to promote and service Dubai as a business and tourism center”. And the promotion of both Dubai and Emirates is continuing. 

In October, Sheikh Ahmed bin Said Al Maktoum, the president of Dubai Civil Aviation and the chairman of Emirates, announced that Dubai airport’s third terminal, to be operational in 2005, will increase aircraft parking positions from 27 to 61 – increasing annual passenger handling capacity to a staggering 35 million. But all these various expansion and restructuring projects in Gulf are being conducted on the assumption that there will be a sufficient number of passengers to fill most of the seats on the new aircraft. That seems unlikely. “At present,” says one industry analyst in the Gulf, “passenger traffic is largely driven by the market in the Indian subcontinent, which 
tends to be low yield. 

A number of Gulf airlines are competing to bring backpackers from northern Europe to Nepal and other destinations, and they are offering ludicrously low fares just to try to fill seats.” The analyst says Emirates has done better than some other Gulf airlines in achieving a healthy mix of business and economy passengers. “The more people you can attract to the front and middle of the plane,” he says, “the more creative you can be about fares in the back”. 

But the backdrop against which all regional operators in the Gulf are having to work is one in which, to quote one Western diplomat based in the region, “there are too many airlines, too many airports and too small a share of the market. In 1999, all the major airports of the Gulf put together handled just over 20 million passengers – that is, about the same as London’s Gatwick airport. The local markets simply can’t sustain all these airlines.” Of the regional airports, only those of Dubai and Bahrain – the latter, handling around 4 million passengers a year, sees itself as the hub for the northern Gulf – look set for expanded traffic. Dubai overtook Bahrain in passenger volume in part because it is located geographically closer to the Indian subcontinent and the Far East, and partly because it has always operated an open-skies policy. Bahrain, by contrast, pursued restrictive access policies for many years. Dubai also benefited hugely by going it alone during the Iran-Iraq War of the 1980s and keeping air links with Iranian airports open when all other Arab Gulf states closed them. This gave Dubai a strong foothold in the lucrative Iranian market, one which it continues to exploit. 

But the development of Dubai and Emirates Airlines, together with the expansion of Qatar Airways and Oman Air – the Muscat-based carrier which began operations in 1993 – is undermining Gulf Air, the airline which represents the best hope for developing a GCC-wide carrier. 

As recently as 10 years ago, Gulf Air was handling 80 percent of traffic in and out of the region. Today, its share has dropped to 30 percent. The government in Doha announced recently that Qatar Airways was being promoted to the position of national carrier, with Gulf Air (in which Qatar, Bahrain, Oman and Abu Dhabi each still hold 25 percent shares) relegated to second position. “The day will come, I believe, when Qatar and Oman will walk away from Gulf Air,” an aviation expert in the Gulf said. “I think we are in for more fragmentation, rather than consolidation.” Ominously, Sharjah, Dubai’s close neighbor in the UAE, is rumored to be planning to start its own airline in the near future. 

The lack of coordination in air services reflects the failure of the GCC to integrate policies on a wide range of issues. The GCC Aviation Council has turned out to be little more than a talking shop, its hands tied by the lack of progress towards cooperation in other fields. “National airlines and national pride are still more important to the Gulf states than anything else,” a Western diplomat said. “The GCC operates more in name than anything else”. In an ideal world, the six GCC states would sink their money and energy into greater cooperation and coordination – not just of their airlines, but also of aviation services of all kinds. 

So, for example, as well as there being far too many airports for the size of the local populations and the number of travelers coming from outside the Gulf, air-traffic control units operate on a national, rather than a regional, basis. Above all, individual GCC states vary greatly in their regulations for the issuance of visas. “The absence of a GCC-wide visa puts a major obstacle in the way of the expansion of passenger traffic on intra-Gulf services,” one local travel operator points out. “Passengers from around the world arriving at, say, Bahrain might want to visit Qatar or Oman. But chances are they won’t have visas, so they will be unable to do so”. Not all those in the airline industry in the Gulf are washing their hands of the problems arising from the fragmentation of the business in the region. 

The Bahrain government is to host an international conference next February on the impact of globalization on the region. The organizers say they fear that Gulf Air and other Arab airlines may suffer if they do not wake up to the impact of the growing trend towards the formation of international alliances. The need for cooperation is not driven just by the threat of international alliances and the need for a better sharing of a limited passenger market. Also looming is a day in the more distant future when the oil wells start to run dry. 

No one is suggesting a return to the flattened sand runways of the kind my father experienced. But Gulf airports, and Gulf airlines, need to start making business plans that work. If they do not, then they risk disappearing under the desert sands.

Mourad TEYEB


Email: Mourad Teyeb 

Mourad Teyeb Mourad Teyeb holds degrees in English and Literature, Educational Psychology, and Computer Science.  Fluent in English, French, Arabic, German, and Italian. Mourad's, Mourad trained with the African Center for the Training and with Recycling of  Journalists, Tunisian Papers and Magazines.  In additional to journalism, Mourad has also had travel agent tour operating training. (More about Mourad Teyeb.)

#  #  #


| Top of Page | More Articles | Home |


Questions or Problems? Email:
Last Revised: Friday, May 15, 2015 06:38:58 AM
Copyright 1995 - 2013 Travel-Watch. All rights reserved worldwide.
Travel-Watch - 1125 Bramford Court, Diamond Bar, CA 91765 - Phone: 909-860-6914 - Fax: 909-396-0014
Email: - Web: