Four Corners
Our Four Corners contributors look at the westwards shift of the aviation world’s heart, the problems besetting Indian airlines, the huge growth in Latin American air travel and perhaps a ‘silent class’
miDDLe eaSt Heading West! Linda Celestino
General manager inflight services, Oman Air
With over one third of the world’s population living within four hours’ flight time of the Gulf region, and more than two thirds living within eight hours’ flying time, has the centre of the world – the aviation world, at least – moved west from its previous location in the Far East? The rapid emergence of the
“So, yes, the centre of the aviation world is moving west and if the Middle East is not yet totally
dominant, it looks as if it will be soon”
inDia Stormy skies Zafar Siamwala
Chief operating officer Oberoi Flight Services
Doha, India and Mauritius
Indian Aviation Industry is passing through stormy times with Indian carriers finding it extremely challenging to continue with their expansion plans and existing operations, due to rising fuel prices and Government policy constraints. Indigo, the only low-cost airline,
“Indian Aviation is in stormy times due to policies and
increasing fuel prices”
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continues to earn profit, whereas all the other airlines faced tough times and many of them had to delay employee salaries owing to their bad financial conditions. The crisis became more evident recently when major private player Kingfisher Airlines cancelled its operation on a number of routes owing to the losses it was incurring. The Government is also under pressure as the state-run Air India
itself is reeling under a huge debt, estimated at over US$8 billion. A 50 to 60 per cent hike in jet fuel prices, which account for 40-50 per cent of an airline’s operating cost, has made it difficult for airlines to make their operations profitable. While a bailout package can help the ailing industry bounce back to its growth trajectory, it has become increasingly debateable as to what should be the primary focus of the Government, to spend taxpayers’ money to help the ailing aviation sector or to focus on mass transportation systems! Jet Airways is likely to benefit from
the weaknesses at both Kingfisher and Air India, by attracting corporate customers and improving
yields and load factors. Jet Airways, although being the strongest of the three Indian carriers in the full service segment, is embracing the low cost model further in 2012. JetKonnect and JetLite brands have been consolidated under a single brand to remove confusion in the market and strengthen its positioning but operating level profitability will continue to remain under pressure. With mixed reactions, the Industry
is expected to post a combined loss of US$2.5 billion in fiscal year 2011- 12. The Government has approved Indian carriers to directly import jet fuel and open up more bilaterals for Indian carriers to operate on International routes.
Middle East as a global hub has been hard to ignore, and for those of us who are based in the region, the tremendous growth figures in all areas of the industry – including passengers, cargo and airport retail – are just a sign of what is still yet to come. Projections for continued growth
are staggering by any measure and it appears that recent airport
upgrades - including additional runways, taxiways and airport stands, terminal expansion and new airport constructions in Abu Dhabi, Dubai and Muscat - will be hard-pressed to keep up with the expected increase in traffic. With increasingly high numbers of
aircraft on order, visionary strategic plans aspiring to nothing short of transforming the aviation industry as we know it, and a seemingly bottomless cash pit, is the growing dominance of the Middle East unstoppable? Within the region, there is an air
of quiet confidence and carefully worded responses are offered when those charged with the responsibility of designing this
brave new Middle East-centric world reflect on just what makes their plans so unique. And indeed so successful! Comparisons with the current industry situation in both Europe and the Americas, point to a vastly differing modus operandi. The luxury of remaining product and customer-focused, and having the ability to recruit and retain industry leaders whilst strategically investing in the required aviation infrastructure, is not one afforded to many airlines outside the region. So, yes, the centre of the aviation
world is moving west and if the Middle East is not yet totally dominant, it looks as if it will be soon. The game has changed!
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