Comment: No barriers to growth in the Gulf?

Comment: No barriers to growth in the Gulf?

The travel industry frets continuously about ‘UK plc’ being left behind by rivals because the government does not understand the value of air travel.

The argument is sometimes overstated – Heathrow remains the world’s biggest international airport and actually extended its lead over its nearest competitors following the downturn in travel after 2008. But it is a concern based in reality, not fantasy.

Leave aside the airport-building boom in China - for the moment, most Chinese travellers do not depart China, although that does not mean many of them won’t at some point - and it’s the Gulf carriers that pose the most serious threat to Europe’s long-haul airlines.

It is debatable how far Emirates, Etihad and Qatar Airways can go to supplanting British Airways as the airline of choice for many UK flyers or to displacing Virgin Atlantic from its sizeable niche, and BA has found means to break its former constraints through IAG and its move to acquire BMI.

For all the complaints, the southeast is hardly starved of capacity. Heathrow is an airport handling 65 million passengers a year at which BA looks like holding 50%-plus of the slots, serving the world’s biggest financial centre and holding a commanding position on transatlantic routes in both hemispheres.

Gatwick, London’s second airport, is the base of Europe’s second-largest carrier - and there is nothing like easyJet in the Middle East. Set aside London City and Luton and we’ll mention Stansted only in passing given the direction in which its traffic is moving (consistent decline year on year) might suggest the southeast does not so much need a new airport as enhanced capacity in the right place(s).

But to return to the Gulf carriers: how big is the threat? There isn’t space here to consider all three so let’s focus briefly on Qatar Airways, which showed its intent last week by opening its first dedicated lounge outside its Doha base – at Heathrow.

The carrier’s chief executive, Akbar Al Baker, argued that despite the economic gloom: “This shows we have confidence in Heathrow. You should take us very seriously.”

Qatar has grown from 35 aircraft to 105 in next to no time and Al Baker has plans to add considerably more. He will further demonstrate his confidence in Heathrow by operating the first Boeing 787 service from the airport later this year before any UK carrier takes delivery of the Dreamliner. “Qatar will raise the bar in air travel,” he says, throwing down a series of gauntlets: “I guarantee business class in Qatar Airways will be more luxurious than any first class flying today.”

Al Baker appeared sanguine about Heathrow expansion (but then he can afford to be), suggesting: “Sometimes with politics you have to go with the flow.” His reputation for getting things done suggests going with the flow is not his default position. However, Al Baker added: “Heathrow needs room to grow or your neighbours will overtake you.”

He has a reputation for getting things done and, as vice-chairman of the new Doha International Airport rising on reclaimed land next to the existing airport, is likely to see the project completed on time this December.

I was fortunate to visit the new airport at the weekend and have to say it looked almost as close to completion as Heathrow’s Terminal 5 did when I toured that a month or so before it opened.

The airport will be as near to exquisite as an airport can, if such a word is applicable to a hub built to handle 24 million people a year and capable of expanding to 48 million. The design and construction set new standards for the world’s airports and suggest Qatar will have no difficulty developing the air-conditioned, dismountable football stadiums it requires to host the 2022 World Cup.

There is a bigger question than the stadiums, however: whether the political and social relations of Qatar can keep pace with the spending and technology at the country's disposal.

I suspect that providing the World Cup stadiums will be easier than handling and policing the World Cup crowds and the associated drinking. Doha has little or no street life, no bars and no drinking save in five-star hotels and away from public areas, and its police little experience of crowd control.

In microcosm, this might be a clue to a check on the progress of the Gulf carriers and their ambitions. Qatar and its regional rivals will continue to grow rapidly and capture an expanding share of the global market. But they will become part of the existing order in the aviation world rather than invert it.


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