The Gulf is likely to see the emergence of new low-cost carriers as the trend towards short-haul tourism continues, according to the chairman of Emirates Airline.
Sheikh Ahmed bin Saeed Al Maktoum told reporters at Arabian Travel Market (ATM) he could not rule out the possibility of a rival to Emirates’ budget sister airline flydubai – whether operated by Emirates or another company.
“If the market’s there, then why not?” he said.
Sheikh Ahmed’s comments – made as Emirates prepared to announce a 34 percent profit hike in 2014 on Thursday – echo those made by a Boeing executive at the ATM conference who predicted that more and more airlines in the Middle East will launch under a low-cost business model.
Marty Bentrott, Boeing's vice-president of sales for Middle East, Russia & Central Asia, said: “I think there is opportunity here for more of the low-cost business model given the dimensional travel of these large hubs that move people here to Dubai, here to Doha or to Abu Dhabi and then move them to other destinations," according to Gulf News.
Sheikh Ahmed said: “People now go on holiday for six hours – we’ve seen that in the Gulf, people coming from elsewhere in the GCC on a day flight to Dubai and leaving in the evening: this is what is happening. And the only way of doing this is by flying.
“We are always wanting the people who pass by to have that motivation to come for a short period – whether it’s by competitive prices, ease of travel, places and things that they love – and we want to make them comfortable coming back.”
He said he was “not at all” worried about the potential for increased competition for flydubai, insisting there is room in the market for growth by all countries and airlines.
“Any country has the right to do whatever suits that airport or that country in terms of expansion. If they want to, can I stop it? No. I have been asked this question many times and I say, if you go back in time over the past ten years, you see that Etihad has grown, flydubai has grown, Qatar Airways has grown, Emirates has grown, Turkish Airlines has grown.
“So many airlines have grown and we have never really seen the number of travellers shrink and I think it’ll never be.”
Consequently, he added, he remains “in no doubt” Dubai will meet its target of attracting 20 million visitors a year by 2020. But this inevitably means greater competition in future from rival airlines and the need to keep ticket prices reasonable.
“You see many airlines that are not in Dubai today and I’m sure you’ll see them here in future because they simply cannot ignore [Dubai].
“That is why I cannot keep my ticket prices up if there are many forces pushing them down, because we are not the only ones in the market and there are people out there looking for the best prices. You know how competitive the Dubai market is.”
Meanwhile, Emirates is pressing ahead with global expansion plans that could include new US routes despite the ongoing subsidies row with American carriers, Sheikh Ahmed told reporters. He revealed Emirates is in discussions with several US cities over potential new routes connecting them to Dubai, and that he hoped to make further announcements soon. “The minute you stop, somebody will pass you,” he said.
However, the chairman ruled out the possibility of Emirates acquiring other airlines to help spur its growth.
“I think you’ll see we never pay attention to buy other airlines. It’s my decision to make [in future], but as we speak today I say we are not going to...be buying somebody else because they are not doing enough, for me to sort their problems.
“I am focussing on the Emirates airline and this is what I am focussing on,” he concluded.
The Dubai royal revealed he loves fishing, and always chooses to visit places “where there is sea and fishing”.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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