Business | Analysis

Wisdom lies in partnerships not confrontation

Many international carriers have come to realise that cooperating with the three Gulf airlines leads to gains

  • Dr. Mohammad Al Asoomi, Special to Gulf News
  • Published: 12:46 August 21, 2013
  • Gulf News

Last year, the Lufthansa chairman and CEO Christoph Franz made hysterical statements against Gulf carriers, even to the extent of saying that the Gulf countries set these up in the desert and launch them at competitive prices in the world market.

At the time, it was pointed out that these statements reflected a certain amount of European annoyance because of the successes achieved by Emirates, Etihad and Qatar Airways. These were the result of years of continuous efforts which enabled the Gulf carriers to extend their networks across continents and present travellers with optimum services.

This made the airlines excellent competitors and won for them the trust of all, including European fliers. Instead of taking into consideration developments in bilateral economic ties which include an open skies policy and open competition, Lufthansa’s chairman and CEO resorted to criticising Gulf airlines.

Fleet development

GCC airlines have invested more than $50 billion (Dh183.5 billion) in developing their fleets and infrastructure, most clearly shown by the continued expansion at the Abu Dhabi and Dubai airports and in the new hub being constructed in Doha.

That facts will prevail in the end has been shown by the Lufthansa chief now stating that his airline seeks to co-operate and have partnerships with airlines in the Gulf. This is indeed a welcome decision as it will profit both his company and the Gulf carriers.

Franz knows better than anyone else that areas of co-operation are available and that another German carrier — Air Berlin — has profited from its partnership with Abu Dhabi’s Etihad. He should also be also aware that if it were not for this alliance, Air Berlin would have lost key competitive capabilities.

In this context, Lufthansa can make use of the experience of the Australia’s Qantas, which changed its unfriendly position towards Emirates to a partnership which benefited and assisted it in overcoming many of its difficulties. Today, the Dubai airport is considered one of the most important stations for Qantas outside of Australia.

Globalisation

Hence, the three Gulf airlines have not only become global enterprises, but co-operating with them leads to gains for others as well. Many international carriers have come to realise this fact, and lately grasped by Lufthansa as well.

Partnership fields are manifold and include passengers, transit, freight, facilitating seat exchanges and high quality services. This is a crucial part of globalisation that has led to the opening up of markets and increasing the intensity of competition in all fields.

This global trend cannot be stopped because some may be dissatisfied with the success of others; instead, making use of the experience of these accomplishments is a much better idea.

This is especially true as two leading aviation behemoths — Airbus and US Boeing — have become more involved in marketing their aircraft to Gulf airlines and make up more than 80 per cent of the Middle East sales. This means these giant companies’ interests are linked closely to the progress of Gulf carriers.

The world of aviation and airline competition should witness more changes in the future. These developments must be absorbed and dealt with in a manner suitable with the changes witnessed in other sectors.

There will be many advances and with them new establishments will rise that will counter- balance economic forces in a changing world. This calls for dealing with matters in a manner befitting the times.

 

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.

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