Friday, April 21, 2006

Mideast Airlines develop extensive networks in Europe and Asia

To feed their hubs, the Gulf carriers are developing extensive route networks in Europe and Asia. Emirates, for example, operates 84 flights a week between Dubai and London -- three times as many as British Airways (BAB) -- as well as serving Manchester, Birmingham, and Glasgow. Qatar flies to six major European cities, and Etihad flies to five.
Gulf airlines also have become a major force in the fast-growing Indian market. "They have a strong intent to capture traffic on key routes from India to [Britain] and the U.S.," wrote JP Morgan analysts Peter Negline and Wai-Shin Chan in a recent research report. That growth has put pressure on Indian carriers, especially startups such as Jet Airways, the analysts said.
All the Gulf airlines are government-owned, fueling suspicions that they benefit from subsidies. Air France-KLM (AKH) Vice-Chairman Leo van Wijk even confronted Emirates President Tim Clark at an industry conference last year, demanding to know how Emirates could afford the $37 billion worth of planes it has on order.
Clark says Emirates gets no subsidies, apart from a $10 million startup grant in 1985.
20/04/06 BusinessWeek/Carol Matlack