Airline expansion and growth limited by poor airport infrastructure

(eTN) - Major airlines in Europe and North America have for many years now watched new global players emerge, eating deep into the cake of market dominance previously shared by only those few which ha

, Airline expansion and growth limited by poor airport infrastructure, Buzz travel | eTurboNews |Travel News

(eTN) – Major airlines in Europe and North America have for many years now watched new global players emerge, eating deep into the cake of market dominance previously shared by only those few which have survived globalization and either grew smartly through acquisitions or – as often the case in the United States – hiding behind the cover of Chapter 11 to weather the various storms of the last decades.

Angry periodic outbursts from airline CEOs speaking at international aviation forums, were swiftly countered by their counterparts from Gulf-based airlines, which have enjoyed phenomenal success rates at a time when other airlines’ balance sheets were inked deep in red. Admittedly, most of these airlines are in government hands, benefitted from liberal open air policies, generous bilateral air services agreements signed long before this trend became public knowledge, substantially lower fuel costs in their home hubs, and a broadly lower-cost base compared to the rigidly structured and unionized European or American carriers. But there is more to their successes in capturing a significant share of the global traffic, not just through excellent service on the ground and in the air, their often sprawling luxurious Business and First Class lounges, than the eye of the uninformed one off observer may immediately see.

European airports, the brand new Berlin International Airport is a case in point, are often restricted in regard of night-time operations, giving the “airlines in the desert sand,” as a previous alliance chief put it to this correspondent during an interview, a competitive advantage they use to the fullest, with the cooler night hours being the busiest connection times all day. Well-developed schedules bring passengers via Dubai or Doha into the respective hub for a single transit and then to their final destination without wasting much time. And it does not end with operating hours, airport capacity is also an issue and of growing importance in the fight for market domination.

Heathrow was told by its political masters that there will be no added runway, and Frankfurt’s 4th runway, when eventually ready, will be subject to night-time restrictions, something residents living near the airport will appreciate but which neither the airport company nor airlines flying or based there, like Lufthansa, really fancy very much as it eats into their revenue potential and prevents the optimal use of their fleet.

And so are the Gulf giants like Emirates, Qatar Airways, and Etihad, and a variety of others marching on, several of them getting new mega-hub airports built which can facilitate larger fleets, process ever more passengers, and siphon off more and more traffic from the traditional aviation powers of yesteryear. Connecting the world via Dubai, Doha, or Abu Dhabi is reality today, as the most modern of aircraft can literally reach any point on the globe without a stop from the Gulf, unlike the old days when stops were needed, for instance, in Iceland to reach the New World.

Then the concept of “hub and spoke” developed, first in the United States and then copied in Europe and beyond, and it had its place to connect millions upon millions of passengers to onward flights. But like the battleships of old, it outlived its usefulness, and the carrier groups of today will soon need all their might to defend themselves rather than being the offensive tools of yesterday. Tomorrow belongs to the long- haul Gulf giants able to fly the most modern fleets and connect the world via their brand-new, super-mega airports.

In Dubai’s Jebel Ali region, a new such giant airport has already opened and will eventually have 6 runways, terminal space for up to 150 million passengers a year, and a high-speed train to the city itself, and there are constant rumors that the present Dubai International Airport will eventually become a sole base for Emirates, something which, in good time, will either be confirmed or discounted.
In Doha, Qatar Airways, the world’s “5-star airline,” expects their equally fast-growing fleet to operate from a brand-new super airport just a few “clicks” away from the present international airport by mid of next year. Across the Arabian Peninsula, airports are being upgraded, enlarged, or built afresh to provide the infrastructure these mega carriers require.

This can only mean that faced with infrastructure constraints and legally-imposed operating caps on their own airports back home, the European and American airlines will see aviation developments move yet further and faster away from them with few options left to hold against the trend.

There are other expanding airlines on my mind, maybe not on the scale of the Gulf giants, but nevertheless significant for Africa. Nairobi’s Jomo Kenyatta International Airport (JKIA) is seen as the single biggest constraint for faster growth by Kenya Airways, and until a second runway has been constructed and significantly larger terminals been opened, all efforts by “The Pride of Africa” will be in semi-vain as JKIA is way beyond its operational capacity already. The single runway, when closed by an incident, has repeatedly forced airlines to divert or delay flights when the runway was blocked and other operational “mishaps” by Kenya Civil Aviation Authority (KCAA), like successive power outages this year and last year, have also had the same effect. Kenya Airways will, over the coming decade, double if not triple its fleet and while “small” compared with the Gulf trio, is nevertheless one of Africa’s leading airlines and a vital link for East Africa to the world. Yet, their contribution to the national economy was long overlooked if not ignored, and the Kenya Airport Authority is clearly at fault over failing to cater to their national airline’s growth plans by having new facilities and structures ready now instead of in a few years’ time.

In neighboring Rwanda, the government, aware of the importance of aviation for a land-locked country, is busy finalizing the planning for the new Bugesera International Airport as RwandAir’s present hub, Kanombe International, while closer to the city, will in a few years no longer be able to accommodate the national airline’s growing fleet of aircraft and flight movements. RwandAir, presently awaiting delivery of their 7th aircraft, is due to double that number in 5 years’ time and plans to nearly triple it by 2020, flying to a number of intercontinental destinations at that time, which need a longer runway, more terminal spaces, and a fully-fledged air cargo center.

Similar circumstances apply to Turkish Airlines (THY), another airline with a phenomenal growth factor in recent years and connecting East Africa via Istanbul to their global network. With some 175 aircraft and flying nearly 30 million passengers a year, Turkish will need a new airport soon, considering the additional aircraft on order already and the new destinations the airline has announced for coming years, but the congested Ataturk International Airport in Istanbul will remain THY’s hub for at least another 5 years, as a site for a new airport has not even been chosen yet nor has any detailed planning began in earnest.

Like in Nairobi with Kenya Airways, THY has the same growing problem of congestion, which impacts on the travel experience of passengers who have plenty of airlines to choose from when leaving from Africa for overseas and, courtesy of advertising and PR campaigns, and the easy access to web-based information, know what transit “should be like” as opposed to “what it is like” – and many choose accordingly and switch loyalty once having a single negative experience.

And herein lies the crux of the matter: countries with good planning and foresight have expanded and modernized their aviation hubs to cater to present and future expansion by their national airlines, giving them space to grow into and facilitate it. That will give those carriers a competitive advantage, capture passenger and cargo traffic, and leave others trailing in their wake, as they face congested airports, lack of landing slots, and overcrowded terminals.

Finally, in closing, and to make matters rather worse for European and American airlines, aviation has become the punching bag for many western governments, which slapped them with “eco taxes” left, right, and center, while allowing the playing fields to be tilted by restrictions on operating hours and a range of restrictive regulatory demands. These extra added costs for carriers in Europe and America without getting much back from their governments, combined with the outlined other factors, put the proverbial smiles on the face of Gulf airline executives, and they are right to tell their envious competitors to “pull up or shut up,” and your guess is as good as mine which way that challenge will go and who will take the spoils in the “battle of the skies.”

, Airline expansion and growth limited by poor airport infrastructure, Buzz travel | eTurboNews |Travel News

Author: editor

, Airline expansion and growth limited by poor airport infrastructure, Buzz travel | eTurboNews |Travel News