Aviation Business - June 2010 by ITP Business Publishing

6JG %QWPVFQYP *CU 5VCTVGF (TCPMHWTV #KTRQTV %CRCEKV[ GZRCPUKQP OCFG D[ (TCRQTV $[ YG YKNN JCXG DWKNV C PGY TWPYC[ 9G YKNN KPETGOGPVCNN[ KPETGCUG QWT VQVCN UNQV ECRCEKV[ D[ $[ GZRCPFKPI GZKUVKPI VGTOKPCNU CPF DWKNFKPI VJG PGY 6GTOKPCN YG YKNN DG CDNG VQ KPETGCUG ECRCEKV[ HTQO VQ CRRT OKNNKQP RCUUGPIGTU RGT [GCT 9G CTG RTGRCTGF HQT VJG PGY IGPGTCVKQP QH YKFGDQF[ CKTETCHV (4# UVCPFU HQT JKIJ CKTETCHV WVKNK\CVKQP TCVGU DGECWUG QH KVU GZVGPUKXG CKT CPF TCKN HGGFGT PGVYQTMU CPF 'WTQRGoU OQUV RQRWNQWU CKTRQTV ECVEJOGPV CTGC &QPoV OKUU VJG EQWPVFQYP HQT PGY ECRCEKV[ CPF KPETGCUG [QWT [KGNF YKVJ C TGNKCDNG CKTRQTV RCTVPGT HQT VJG HWVWTG YYY HTCRQTV EQO

(TCRQTV 6JG #KTRQTV /CPCIGTU

CONTENTS

JUNE 2010 VOLUME 09 ISSUE 06

7 NEWS UPDATE

The technical capabilities of Air India have been placed under scrutiny, after the airline suﬀered aircraft malfunctions across the Middle East. Etihad has amended its housing policy, with new employees who live outside of Abu Dhabi no longer eligible for accommodation allowances. Emirates Airlines has refuted claims that it receives substantial ﬁnancial assistance from the Dubai government. Gulf Air has launched a voluntary redundancy scheme for employees.

18 COVER STORY

Why the Japanese capital of Tokyo has whet the appetite of Emirates, Etihad and Qatar Airways in the Middle East.

36 TOP 20 GLOBAL AIRPORTS Skytrax has announced the top 20 winners of its annual World Airport Awards, based on the results of 9.8 million airline passenger surveys.

22 COMPANY PROFILE

Air Arabia is emerging from the shadow of its illustrious neighbours with a business model that could change the face of the regional industry, explains chief executive oﬃcer Adel Ali.

42 COMPANY PROFILE

Swiss cabling specialist Reichle and DeMassari (R&M) is on hand to ensure the Middle East’s airports stay connected.

26 MARKET REPORT

With the recession causing a dent in premium travel demand, a number of airlines have decided to cut ﬁrst class from planes altogether, but are they turning passengers away for good?

30 SHOW REPORT

This year’s Arabian Travel Market (ATM) exhibition in Dubai was a successful platform for bringing together some of the Middle East’s leading airlines, including the likes of Emirates, Etihad, Qatar Airways and Oman Air. www.arabiansupplychain.com

46 MRO MARKET REPORT

With Middle Eastern airlines operating a growing ﬂeet of aircraft, the region has emerged as a lucrative MRO market.

56 ASK THE EXPERT

How can airports in the Middle East improve the passenger experience?

64 DEPARTURE LOUNGE

Lufthansa’s Schaher Murad celebrates the international airline’s 25th year of operations in the Kingdom of Bahrain. June 2010

EDITOR’S LETTER Maintenance matters for airlines

iant strides have been made in the quality of aircraft maintenance over the past decade, with millions of dollars being invested by Middle Eastern airlines each year to ensure the safety of their fleets. Its little surprise, therefore, that the region has been flagged as a lucrative market for maintenance, repair and overhaul (MRO) suppliers around the world – a sector that we have profiled in this issue of Aviation Business. According to research, demand for MRO services from airlines in the Middle East will increase by 7.6% a year for the next decade, a favourable amount when compared to the global average of 3.2%. So, what is driving this growth? What types of MRO services are most popular in this region? And what percentage of airlines are outsourcing their maintenance operations? All of these questions are answered in our market overview, while leading players such as JorAMCo, Lufthansa Technik, SIA

Engineering Company and Turkish Technic also provide their input on opportunities and challenges in the Middle East. Maintenance was a much-discussed topic for Air India last month, following a series of technical problems with its aircraft throughout the Middle East. As you’ll read in our news section, the tragic Mangalore crash was the most covered incident for the troubled national carrier, although its reputation has also been hampered by additional malfunctions in the United Arab Emirates, Kuwait, Saudi Arabia and Oman within the space of weeks. Since these incidents followed an engineers strike, leading to passenger delays and runway closures, let’s hope Air India’s woes are addressed in the near future. If you have any comments to make on this month’s issue, please email Robeel Haq, senior group editor of Aviation Business magazine (robeel.haq@itp.com)

BUSINESS Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: + 971 4 210 8000, Fax: + 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP Business Publishing CEO Walid Akawi Managing Director Neil Davies Managing Director Karam Awad Deputy Managing Director Matthew Southwell Editorial Director David Ingham Commercial Director Diarmuid OMalley Editorial Senior Group Editor Robeel Haq Tel: +971 4 210 597 email:robeel.haq@itp.com Advertising Sales Manager Nick Lowe Tel: +971 4 210 8306 email: nick.lowe@itp.com Studio Group Art Editor Dan Prescott Designer Angela Ravi Photography Director of Photography Sevag Davidian Chief Photographer Khatuna Khutsishvili Senior Photographers G-nie Arambulo, Efraim Evidor, Thanos Lazopoulos Staff Photographers Isidora Bojovic, Lyubov Galushko, Jovana Obradovic, Ruel Pableo, Rajesh Raghav, George Dipin Production & Distribution Group Production Manager Kyle Smith Deputy Production Manager Matthew Grant Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robles Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati Marketing Head of Marketing Daniel Fewtrell Marketing Executive Masood Ahmad ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 286 8559 Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. Printed by Horizon Printing Press Controlled distribution by Blue Truck Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

BPA Worldwide Audited Average Qualified Circulation 6,166 (Jan - June 2009)

June 2010

www.arabiansupplychain.com

We improved the CFM56® repair process to deliver you six-ﬁgure savings.

Pratt & Whitney’s Global Service Partners has a unique airfoil repair for the CFM56 HPT nozzle guide vane. And that’s just one of our repairs that covers more than 70 percent of the repair value for the CFM56 engine family. Put our worldwide network of 48 facilities to work for you and see how you can save millions while getting improved durability and higher yields from the world’s only OEMRO® company. To learn more, visit www.pw.utc.com. Maintenance | Repair | Overhaul | Engine Efﬁciency Services

It’s in our power.™ CFM56 is a registered trademark of CFM International.

044

READER’S LETTERS

READER’S LETTERS Got an opinion? Have your say at... Celebrating the past I would not dispute the challenges facing the CEO of Gulf Air, given the state of the aviation industry at present. However the profile of the airline could be raised in the public eye by acknowledging that Gulf Air has been in business for the past 60 years. It is something that Kingdom of Bahrain can be proud of, in spite of the rough episodes that the airline has experienced in recent years. Majali has paid less than lip service to the former employees (Bahraini or expatriate) of the airline and their contribution, especially the few still alive who paved the foundations of the airline in the 50s and 60s. It may not be a condition for the survival of the airline to pay homage, however without their efforts in the past Gulf Aviation/Gulf Air might have disappeared a long time back. It is a history worth acknowledging and is part of Bahrain’s modern history of achievements. All the other Gulf States have followed with their own start ups that owe a debt of gratitude to Gulf Air. Sky Observer

‘Mass resignations’ at Gulf Air James Hogan turned the books in to black after three years of restructuring but it dipped back to red after he left for Etihad. So I think there are some lessons to be learnt from that. Babu Narayan

How to boost the reputation of Bahrain’s national carrier Once upon a time, Gulf Air was considered the premiere airline in this region, before others were established in the Middle East. The geographic location of Bahrain alone should help to differentiate Gulf Air from other international players in the market

June 2010

and this is something that needs to be capitalised on. Perhaps it’s time to re-shuffle the management, as well as GSAs, field offices and stations around the world. In addition, strict sales and income targets should be set and achieved. Although this sounds extreme, it will be essential in order to reclaim this great airline’s status as a leading international brand. Edmond J. Philippi, Jordan

Building a development strategy for Gulf Air Regarding the attempts to re-develop Gulf Air into one of the Middle East’s leading carriers, I believe the airline needs to hire the services of consultants from out the airline industry, as this will provide it with a fresh outlook and help to generate innovative ideas. Viren Naroola, UAE

Mid-air alert for Saudi Arabian Airlines at Kuwait airport It was interesting to read your article on the Saudi Arabian Airlines flight from Riyadh being forced to abort its approach to Kuwait airport after the crew received an unsafe gear indication upon extending the gear. The aircraft involved, a McDonnell Douglas MD90, has caused a lot of problems for Saudi Airlines in recent times, I hope the management have taken note. Ayman Nour

Rivals ‘will never accept’ the success of Emirates In your recent article about competition between Middle East airlines, Sheikh Ahmed mentioned that Emirates has come a long way and I would definitely agree that the airline has placed itself amongst the top ten in the world. However, in my opinion, Sheikh Ahmed should compete with Singapore Airlines rather than other Mideast

competitors, as Singapore is currently the industry’s best, whether its judged in terms of service standards, revenue or other common benchmarks. Lionel Fernandes

The success of FlyDubai’s business model I am happy to have FlyDubai exist; it always reminds me of AirAsia’s business model, offering cheap travel for everyone. It’s really exciting that you can visit regional countries at such prices over the weekend. Once it launches to India, it will boost weekend tourism to Indian sectors as well. Although a few people may argue, the model where you pay per use works great for me. If I don’t have luggage, I don’t pay for it. Works great. I have already visited Doha, Bahrain and hope to visit Beirut soon, thanks to FlyDubai’s ‘love lower fares’ promotion. Joe Karcia, Dubai

Time for pilot regulation change? Following the Air India plane crash last month, I think its time for India’s Directorate General Civil Aviation to implement certain regulations to produce good pilots. At the moment, anyone with money can join a pilot school, which needs to be reviewed with the introduction of a cut-off percentage threshold for graduates. An inadequate doctor can spoil one or two lives, but dumb pilots can risk hundreds of lives at a time, depending upon the size of the aircraft that is being operated. Rakesh Bhatia

www.arabiansupplychain.com

How will you manage aeronautical data in the future? Just ask how

The way airports and air navigation service providers manage aeronautical information is set to change. Traditional, manual paper-based systems will become a thing of the past. A new, automated way of managing aeronautical information is now a reality. An automated solution dramatically increases efficiency and removes data entry errors. Processes that previously took many days take just a few seconds. Data is of a higher quality and integrity. Our automated aeronautical information management system is called Nucleus. Itâ&#x20AC;&#x2122;s modular and flexible to meet your own specific needs and backed by expert resources. And itâ&#x20AC;&#x2122;s the only solution on the market today that meets the latest ICAO standards on data management. To find out more call: +44 (0)208 750 3600 email: AIM@nats.com or visit: www.natsservices.com

Just Fly. Working with AAR means you can focus on the job at hand. So while you take care of ﬂying, we’ll take care of everything else. No matter what you ﬂy, AAR has the maintenance, logistics and production capabilities to deliver a complete, effective support solution so you can Just Fly. X

Airframe & Landing Gear MRO

Parts & Supply Chain Services

Aircraft and Engine Sales & Leasing

Cargo Handling Systems

PMA Development & Engineering Services

Precision Fabrication

Aviation Supply Chain | MRO | Structures & Support | Government & Defense Services

630.227.2000 | www.aarcorp.com

NEWS UPDATE

Air India experiences ‘technical faults’ across the Middle East AIRLINE OPERATIONS

The technical capabilities of Air India have been placed under scrutiny in the Middle East, after the national carrier suffered a concerning number of aircraft malfunctions across the region last month. Most recently, an Air India flight from Calicut to Dubai was diverted to Mumbai with a suspected hydraulic failure. The incident, which caused an emergency alert at Chhatrapati Shivaji airport, followed the 24-hour delay of a JeddahMumbai flight a couple of days earlier, as a result of “technical difficulties”. Also within the same week, an Air India Express flight from Dubai to Pune plunged 7000ft while the captain was having a toilet break. The drop occurred an hour into the journey and was reportedly caused by a technical error that led to problems with the autopilot. “The aircraft plunged from 37,000ft to 30,000ft after the autopilot stopped working,” an official from the Directorate General Civil Aviation (DGCA), told the Hindustan Times. “It took two minutes for the captain to input the security code needed to enter the cockpit and regain control of the aircraft.” Air India Express also cancelled a flight to Kuwait due to “technical problems” on 25th May 2010, with passengers asked to disembark from the aircraft minutes before the scheduled departure. A few days earlier, the runway at Muscat International Airport was temporarily closed after a rejected takeoff by Air India’s A320-200, which was leaving for the southern Indian state of Kerala when one of the engine’s Exhaust Gas Temperature (EGT) indication went beyond limits. www.arabiansupplychain.com

Technical faults caused Air India’s service disruptions in countries such as Saudi Arabia, Kuwait, Oman and the UAE last month

A number of tyres deflated during deceleration and the aircraft came to a safe stop on the runway, according to reports. A maintenance check later detected that repair work was required on the brakes and the flight was therefore postponed, with a replacement aircraft booked for the following day. However, each of these incidents is minor compared to the tragic crash of an Air India flight from Dubai to Mangalore last month, which killed 158 people including 19 children. The airline has since started to pay interim compensation to families of passengers killed in the accident, offering one million rupees (AED78,000) for each relative that passed away following the crash. “Air India is currently in turmoil. It faces great organisational changes, which employees are resisting, and awkwardly the government,

who brought the new team to turn around the company are obstructing their efforts,” commented Abu Dhabi-based aviation expert Oussama Salah. “Technical problems are nothing new in aviation and sometimes they are cyclic. However, they could be an indication of malaise within

the maintenance staff, which needs to be addressed by management before it becomes a real problem. Although the brand has suffered from these incidents, people still need to travel with Air India because of the airline’s size and reach, at least until viable alternatives are available.”

AIR INDIA: INCIDENT TIME LINE

• • • • • •

FRIDAY 28TH MAY 2010: Air India diverted a flight from Calicut to Dubai after experiencing a technical fault with its Airbus A320. WEDNESDAY 26TH MAY 2010: a Jeddah-Mumbai flight was delayed by 24 hours because of technical difficulties. WEDNESDAY 26TH MAY 2010: an Air India Express flight from Dubai to Pune plunged around 7000ft due to a malfunction. TUESDAY 25th MAY 2010: an Air India Express flight from Mangalore to Kuwait was cancelled due to technical problems. SATURDAY 22nd MAY 2010: an Air India Express Boeing 737-800 from Dubai to Mangalore overran the runway while landing and burst into flames, killing 158 passengers. THURSDAY 20TH MAY 2010: a runway at Muscat airport was closed after a rejected takeoff by Air India. The Airbus A320-200 was travelling to Kozhikode, when one of the engine’s Exhaust Gas Temperature (EGT) indication went beyond limits. June 2010

NEWS UPDATE

Etihad CEO predicts airline struggle to break even in 2010

Gulf Air staﬀ oﬀered voluntary redundancy AIRLINE OPERATIONS

James Hogan aims for 2011 milestone

AIRLINE OPERATIONS

Etihad Airways is unlikely to break even this year due to the negative impact of the global economic crisis and swine flu, according to the airline’s chief executive officer James Hogan. “If we’d had a better year in 2008 and 2009, we would have broken even this year,” he explained to Bloomberg. “The global financial crisis and the pandemic hit us in yield, pushed us back down to 2007 levels.” The UAE’s national carrier, which has never posted a profit since it commenced operations in 2004, should break even in 2011, continued Hogan.

Gulf Air has launched a voluntary redundancy scheme (VRS) for its employees, aimed at optimising the airline’s workforce and efficiency. “A key part of our strategy is to review all cost elements of the business that have an impact on its sustainability and profitability, which includes personnel-related costs,” said Samer Majali, chief executive officer of Gulf Air. “After careful consideration and a series of consultations with the Gulf Air Trade Union (GATU) and Ministry of Labour, we have come up with a VRS that offers a reasonable financial package to Bahrainis and former owner-state nationals wishing to leave Gulf Air and wanting to pursue other business or personal ventures,” he added. “While not all of the GATU’s demands could be fully met, many were taken into consideration and the scheme was modified to accommodate their suggestions. I was pleased

Gulf Air believes its new redundancy scheme will lead to reduced personnel costs

with the final outcome, as both Gulf Air management and GATU have became more aligned following negotiations and reached an understanding for a voluntary scheme.” Participation in the VRS is voluntary and no employees will be forced to take it, according to Majali, although the decision to approve or reject an application will rest with the management committee. Employees with approved applications will receive a compensation of one month’s salary for each completed year of service, three month’s salary as an ex-gratia payment and one month’s salary in lieu of

notice period. In addition, they will receive other benefits such as medical insurance coverage and staff travel benefits. “Whilst we are conscious of the financial impact due to the high number of employees we have on our payroll, our main priority will always be retaining the best and most productive talent” said Majali. “Notwithstanding the VR scheme, we are actively moving on employing more Bahrainis. I am proud to say that today 82% of non-flight crew positions in Bahrain are held by Bahrainis, while our overall Bahrainisation level has reached 54%.”

Qatar Airways registers name for budget airline BUSINESS

Qatar Airways has registered a logo and name as part of its contingency plan to launch a low cost carrier, but currently does not have plans to implement the strategy, the airline’s CEO told reporters last month. “I will only launch a budget carrier if my market share is eroded and this is not happening. People are still selecting to fly in a full service airline, but as I have said in the past I am ready to launch a [low cost carrier] as soon as it is necessary for us to do so,” Qatar Airways CEO Akbar June 2010

Qatar Airways CEO Akbar Al Baker is reluctant to launch a low cost carrier in Doha

Al Baker stated during a press conference at Arabian Travel Market (ATM) in Dubai.

“We can do this in a very short period as time as we already have the logo and

name globally registered and we have a plan ready and an aircraft ready to launch this airline if necessary. But not yet and I hope it will not be necessary,” he added. Al Baker has regularly addressed the potential of launching a low cost carrier based in Doha. “If we find low cost is becoming a threat, in 90 days Qatar Airways can launch a competitive product. We are completely prepared, and we already have a test plane that is flying about under the guise of a full service aircraft,” he previously stated. www.arabiansupplychain.com

NEWS UPDATE

Etihad implements new policy for employee housing in UAE AIRLINE OPERATIONS

Etihad Airways has amended its housing policy, with a clause that states new employees who live outside of Abu Dhabi will no longer be eligible for accommodation allowances, Aviation Business has learnt. The new policy, which gives existing staff a grace period of 12 months to move to the UAE capital, was communicated by Frank O’Dwyer, vice president of facilities, to all Etihad UAE staff in an email last month. It is understood the move will affect many of Abu Dhabi’s 8500-strong workforce, who currently live in Dubai due to the availability of lower rents. Real estate analysts have recently reported that rents in the UAE capital are up to 40% higher than Dubai. “Following an in-depth review of the accommodation assistance policy at Etihad, it has been decided that the company will now only provide housing allowance to those members of staff living in the emirate of Abu Dhabi,” the email, which has been seen by Aviation Business, told staff. “This decision is based on the operational, welfare and financial requirements of the company, as well as our responsibility to Abu Dhabi, which provides enormous support for Etihad and its people. Previous accommodation shortages in Abu Dhabi have now been addressed and it is important that we support the investment that has been made, especially at Etihad-owned facilities,” the email continued. The message added that the policy “is effective immediately for new staff”, although for employees currently residing outside of Abu Dhabi, it will apply no later than 12 months from the email’s sent date. www.arabiansupplychain.com

Accommodation allowances will no longer be available for new Etihad employees that choose to live outside of Abu Dhabi

It added that there would be exceptions to the new rule but they would be dealt with on a case by case basis. An Etihad spokesperson told Arabian Business, the sister publication of Aviation Business, that “this is an internal business decision, and affected staff are being kept well informed”. Meanwhile, Emirates has since confirmed there are no plans to follow its fellow UAE carrier and stipulate in which emirate its staff must live. The airline, which currently has 36,652 staff, said it “has no plans to introduce rules as to where employees can live,” according to a spokesperson. Online forums in Dubai have suggested that staff currently living in Dubai might be tempted to look for jobs with Emirates and flydubai, although the Etihad spokesperson added: “We have no evidence of people seeking to leave employment with Etihad as a result of this change.” Abu Dhabi’s main tourism authorities have also stated there are no plans to follow Etihad and implement similar policies. The Tourism Development and Investment

Company, which is overlooking 55 tourism-related projects in the UAE capital, does not have a policy that dictates

where staff live. “We don’t have any policy as such,” said Bassem Terkawi, director of communications at TDIC.

If you think 40˚is hot, check out our service. Avtrade have been taking the heat in global aviation for over 25 years, across the Middle East and beyond. For more information on our full range of services, check out our great new website avtrade.co.uk

June 2010

NEWS UPDATE

Air Arabia handed licence in Egypt AIRLINE OPERATIONS

Air Arabia has been handed its Air Operators Certificate (AOC) from the Egyptian Civil Aviation Authority, clearing the way for the launch of its Alexandria-based joint venture ‘Air Arabia Egypt’. Formed in cooperation with the Travco Group, Air Arabia Egypt will commence operations from Burj Al Arab Airport this month, with flights to Khartoum and Kuwait. The new carrier, which will serve Europe, the Middle East and Africa, represents Air Arabia’s third hub after the UAE and Morocco. “We thank the Egyptian Civil Aviation Authorities for

their continuous support and look forward to starting our services from Alexandria’s Burj Al Arab International Airport,” explained Sheikh Abdullah Bin Mohammad Al Thani, chairman of the Air Arabia Group. “We are confident that Air Arabia Egypt will pursue the successful path that our UAE and Morocco hubs have followed, by complementing our growing destination network.” Air Arabia operations from Egypt will start with two aircraft serving a selective number of destinations across the region. “We look forward to shortly providing services from our new hub in the heart of the

Sheikh Abdullah Bin Mohammad Al Thani celebrates Air Arabia’s latest milestone

Arab world,” stated Hamed El Chiaty, chairman and CEO of Travco Group. “During this period of continuous growth and prosperity in the Egyptian travel and tourism sector, we are confident of the positive

role Air Arabia Egypt will play in this respect. Travellers in Egypt and the wider EMEA region will benefit from the availability of value-for-money fares, excellent service and a growing range of destinations.”

MEA pilots strike Flydubai purchases ‘revolutionary’ costs US$800,000 in-flight entertainment system AIRLINE OPERATIONS

The chairman of Middle East Airlines (MEA) has claimed that a recent 24-hour pilot strike has cost the Lebanonbased carrier US$800,000 and left around 5000 disgruntled passengers stranded. According to reports, nearly 170 pilots took part in the protest, with threats that more industrial action would take place if MEA failed to meet their demands, which include higher starting salaries, more holidays and better pensions. “They are damaging the reputation of the airline. They are telling people ‘be careful, this is not a stable airline’,” MEA chairman Mohamad ElHout told Reuters.

Mohamad El-Hout slams pilot strike

June 2010

IN-FLIGHT ENTERTAINMENT

Lumexis has selected flydubai as the launch customer for its ‘Fiber To The Screen’ In-Flight Entertainment system. The announcement, which was made at Aircraft Interiors Expo in Hamburg last month, will cover 44 of the airline’s Boeing B737-800NGs, the first of which are scheduled to arrive in October 2010. “In-flight entertainment is very popular with passengers, but traditional systems were expensive for us as a low cost carrier. The Lumexis FTTS touch screen system offers us a flexible, high quality and innovative IFE option at a fraction of the normal cost,” stated flydubai CEO, Ghaith Al Ghaith. The Lumexis system has been designed using fibre optics, rather than traditional copper piping, which reduces the overall cost and makes the system lighter than traditional IFEs. “Any reduction in the

flydubai’s in-flight entertainment system will be available as an optional extra

weight reduces our fuel costs and therefore ensures we can keep our ticket prices low for passengers,” added Al Ghaith. The IFE will be available as an optional extra in the way that baggage and meals are provided to flydubai clients. Passengers will have the ability to choose different parts of the system depending on their preference and how much they want to spend.

“We are privileged to partner with such a forward thinking carrier,” commented Doug Cline, chief executive officer of Lumexis. “As the launch customer for our second generation of FTTS, flydubai demanded extremely low cost-of-ownership and, most importantly, the highest reliability and performance to ensure complete satisfaction for passengers.” www.arabiansupplychain.com

NEWS UPDATE

Government protection claims slammed by Emirates executive AIRLINE OPERATIONS

A top Emirates Airlines executive has refuted claims that the carrier does not pay taxes and receives substantial financial assistance from the Dubai government. “In fact, we have had US$80 million cash in kind since the start of the airline 25 years ago. That’s absolutely peanuts compared to whatever other national carriers have had,” said Maurice Flanagan, executive vice chairman of Emirates Airline. The carrier, which flies to more than 100 destinations worldwide, has been plagued by accusations that its rapid growth has been due to government subsidies. “What does Etihad get every year?”

added Flanagan. “I was given $10 million by Sheikh Mohammed to start the airline in 1985 and he said don’t come back for any more, no subsidies of any kind, no protectionism whatsoever.” He also refuted claims that the carrier does not pay taxes and highlighted the fact that, unlike its competitors, Emirates incurred social costs of around $600 million last year. “Of course we pay taxes. Dubai is a city not a country, we pay municipal taxes,” said Flanagan. “We incur social costs these guys don’t have to think about. Full family medical service, free furnished accommodation for pilots, cabins crew and managers.

Maurice Flanagan dismissed claims that Emirates is exempt from paying taxes

These amounted to around $600 million this year.” Flanagan, who was managing director for the inaugural Emirates flight in 1985, added that “every year we have paid more than $100 million in dividend to the owner of the company”.

Emirates latest annual report showed that the Dubai government was paid a dividend of $260 million in 2010, compared to $793 million in 2009. The results also revealed that the airline’s net profit increased by a record 416% to $964 million.

At Gulf Air, the horizon is only an imaginary line. We are looking for inspiring leaders to be part of our commercial team and drive our new business strategy forward. To scale new altitudes and soar beyond the horizon, read on and ﬁnd the position that suits you.

CARGO Airline Cargo Managers: As one of our Airline Cargo Managers, you will focus on sales, revenue productivity and bottom line contributions. We are also looking for a cargo specialist who will be responsible for developing innovative and proﬁtable cargo products.

COMMERICAL PLANNING Commercial Planning Manager: We are looking for seasoned airline professionals with experience in commercial ﬂeet planning, scheduling, alliances, international / government relations, tariffs and fares. You will need to use all your previous experience to maximize revenue opportunities and achieve the target market share.

PRODUCT Manager Food & Beverage: Hands on experience developing food and beverage concepts that fall in line with the brand, customer proﬁle, service philosophy and ﬂight schedules is what we need. You will be setting new market trends and maintaining the highest standards of food and beverage quality, onboard as well as at our airport lounges across the network. Manager Onboard Products & Services: We need an expert who can skillfully handle standard and specialist products onboard our aircrafts including; galley equipment, cabin service ware and our unique Sky Nanny Service. You will also be revamping and managing products and services in our lounge areas, check-in areas, limo services and retail outlets across the network.

SALES Senior Manager Distribution & Sales Support: We need professionals skilled in managing and developing our sales support and distribution functions. You will ensure the delivery of the best back office services to the rest of the sales and distribution team. Senior Manager Sales: Responsible for developing business plans and long-term sales plans for the business unit in line with corporate objectives, ultimately you will help enhance market share and maximize revenue contributions. Commercial Manager UK and Commercial Manager Iraq: Experienced Professionals to manage the Gulf Air sales organisation in the respective market.

MARKETING Manager E-marketing: As our E-Marketing Manager, you will develop the electronic component of media plans in line with our marketing and communication strategy. Your objective will be to maximize traffic, sales conversion and services usage, while ensuring that all communications are reliable, reputable, consistent with brand guidelines and legally compliant. WEB design specialist: As our Web Design Specialist, your role involves the design of all our web and electronic needs. Your comprehensive knowledge of HTML and Flash action scripts should allow you to design and create artwork in line with corporate guidelines and assist in implementing in-house graphic applications. At Gulf Air, we offer a competitive salary package with a wide range of benefits. If you have the expertise, experience and leadership qualities demanded by these challenging roles, look no further. To apply or find more information, visit www.gulfaircareers.com before 19 June 2010, and grow your career beyond the horizon. All positions are based in Bahrain unless otherwise specified.

www.arabiansupplychain.com

June 2010

NEWS UPDATE

Dubai thinks big with cargo forecast STATISTICS

Dubai Airports has published the latest cargo forecast for its Dubai International (DXB) and Al Maktoum International (DWC) airports, with freight volumes expected to increase by 48% in the next five years. Cargo tonnage will exceed 3 million by the end of 2015, in comparison to 1.9 million in 2009, according to the report, while volumes are expected to rise by 12.2% this year alone. “There is no doubt that Dubai International remains our hub. However, this forecast, combined with our projections for 98 million passengers by 2020, clearly shows the need for a new airport,” stated His Highness Sheikh Ahmed Bin Saeed Al Maktoum, president

Dubai International has the capacity for 2.5 million tonnes of freight per annum

of the Dubai Civil Aviation Authority and chairman of Dubai Airports. “Aviation accounts for around 25% of Dubai’s GDP and our strategy is to have capacity lead demand, so we never constrain growth. Aviation is too important to Dubai’s economy to fall prey to the short-term thinking

Emirates forms partnership with DHL for airfreight security initiative

Sheikh Ahmed at the contract signing

Emirates has formed an air cargo security alliance with logistics company DHL in the Middle East. Under the partnership, Emirates Group Security and DHL Express will collaborate on training activities and security initiatives, while also sharing details on threats. “Whether you work for an airline, airport, civil aviation authority or related service June 2010

provider, understanding the threats to security and how to manage them is crucial,” stated Dr Abdulla Al Hashimi, divisional senior vice president of Emirates Group Security. “Sharing best practices in training and education will lead to a comprehensive and practical approach to combating threats in the aviation industry,” he added. According to Garry Kemp, managing director of DHL Express in the Middle East, North Africa and Turkey, the agreement will enable both parties to work towards a more secure and stable environment for employees, customers and the logistics industry. “This partnership is a significant step towards fostering deeper cooperation in the field of security,” he said. “Enhanced security standards in the UAE will also build stronger consumer confidence in the air cargo sector.”

that has led to costly capacity constraints and congestion at so many airports around the world,” he added. DXB currently has the capacity for 2.5 million tonnes of freight per annum. The first phase of DWC, which opens for cargo airlines this summer, will feature a single A380 compatible runway, 64 remote

stands, a cargo terminal building capable of handling 250,000 tonnes per annum and a road link to the region’s largest port in Jebel Ali. Plans are in place to optimise the cargo capability at both airports to handle anticipated traffic growth to 2015 and beyond. “DWC is clearly a long-term project. Phase 1 will provide much-needed freight capacity in the near to midterm,” said Paul Griffiths, CEO of Dubai Airports. “The vision is to eventually develop Al Maktoum International into a multi-modal logistics hub that capitalises on its location next to Jebel Ali Port, as well as its connectivity by air to major consumer markets worldwide.”

GAC signs cargo deal with Jazeera Airways AIRFREIGHT

Jazeera Airways has selected GAC as its outsourced cargo agent, with responsibility for managing a dedicated team of sales and operations staff from the airline’s cargo division. The agreement was signed last month and marks the beginning of Jazeera Airways cargo operations in Bahrain. “I am certain that combing the outstanding reputation of Jazeera with GAC’s dedicated team of professionals will result in a very successful and enduring partnership,” stated

Peter Gronberg, managing director of GAC Bahrain. Jazeera Airways currently has a fleet of eleven Airbus A320 aircrafts, which fly to 21 destinations. “To successfully kick-start our cargo operations, its important to have a strong local partner with in-depth experience,” stated Robert Hayek, director of sales and operations at Boodai Aviation, worldwide outsourced cargo agent of Jazeera Airways. “GAC is a natural choice due to their proven sales and operational capabilities.”

Jazeera Cargo and GAC representatives sign the outsourced cargo agreement www.arabiansupplychain.com

NEWS UPDATE

Royal Jet unveils loyalty programme BUSINESS AVIATION

Royal Jet has announced the launch of its corporate relationship programme, titled ‘100 Club’, which will offer a series of benefits to members, including a maximum discount of 9% for private jet travel. “If you factor in other airline cost implications for any regional business trip involving several senior executives, a private jet will almost always be more cost effective than conventional travel,” explained John Morgan, vice president commercial of Royal Jet. “Additionally, for members of our new ‘100 Club’, costeffectiveness has been taken a step further, with a range of corresponding discounts and other privileges,” he added.

In order to join, customers of the Abu Dhabi-based company must have a minimum of 20 hours flying time during the year. Depending on the number of hours flown, member discounts increase proportionally, reaching a maximum of 9% for people that fly 100 hours. “Every loyal customer and 100 Club member will continue to experience Royal Jet’s excellent quality service of luxury, safety, security, confidentiality and privacy to every flight, which we have derived from our heritage of serving royalty and heads of state across the globe,” added Morgan. Members will have access to the entire Royal Jet fleet,

Members of Royal Jet’s 100 Club will be oﬀered beneﬁts such as discount travel

which includes Learjet 60, Gulfstream, Embraer Lineage 1000 and Boeing Business Jet. In addition, Royal Jet’s Charter

Brokerage offers a guarantee of aircraft availability whenever a Royal Jet aircraft is not available for customers.

ExecuJet signs three-year Emirates Rizon Jet set for Doha CAE pilot and technical training deal headquarters opening BUSINESS AVIATION

Emirates-CAE Flight Training (ECFT) has signed a threeyear contract with ExecuJet Aviation Group for pilot and technical training services on more than 30 aircraft types. The announcement, which was made at the European Business Aviation Convention and Exhibition (EBACE), covers models for Bombardier, Cessna, Dassault, Gulfstream, Hawker, King Air, Turbo Commander and Westwind. “We are very pleased with the flexible service and highquality instruction that our pilots and aircraft maintainers receive from the EmiratesCAE Flight Training and CAE team,” said Quintin June 2010

Cairncross, operations director of ExecuJet Middle East. “We look forward to consolidating our partnership as we continue to grow our business.” The training will be conducted at four sites across CAE’s global network of aviation training centres, including locations in the United Arab Emirates, United Kingdom and United States. “We are delighted that ExecuJet has continued confidence in CAE to help them achieve their training objectives and be successful in their business model,” said Jeff Roberts, CAE group president of civil simulation products, training and services.

Rizon Jet, the Middle East and UK-based business aviation group, is expecting the completion of its headquarters at Doha International Airport next month, according to CEO Patrick Enz. Accessible via its own apron and with an airport parking area of approximately 5810m², the facility will have a hangar large enough to accommodate four Global XRS or nine Challenger 604/605 aircraft. It will also host in-house workshops and technical offices covering 1579m².

The 737m² adjacent VIP terminal will feature four fully enclosed private lounges, an open lounge area with water feature, indoor garden and duty free area, as well as male and female prayer rooms. “Everything is coming together very well,” said Enz. “We have had a team that is dedicated to this project and have ensured the facility has remained on course for an opening later this summer.” Rizon Jet operates a charter fleet in the Middle East, which includes two Hawker 900XPs and two Challenger 605s.

Rizon Jet will open its new headquarters in Doha International Airport in July www.arabiansupplychain.com

NEWS UPDATE

DXB panned for ‘meet and greet’ ban AIRPORT OPERATIONS

Destination management companies (DMCs) have criticised a new ruling from Dubai International Airport, which bars them from meeting and greeting their own clients at arrivals. Instead, they must pay a fee to Marhaba - part of the Emirates Group - to carry out the service. The new ruling was introduced earlier this year, and DMCs say the regulation will severely dent their already squeezed profit margins. Marbaha has claimed that access for tour operators and hotels had been removed so that the airport didn’t become too crowded. “There are some funny laws coming out right now, such as this example of not being able to meet and greet customers at the airport,” said Ali Helmi, CEO of Net Tours.

“We are forced and obliged to sign a contract with Marhaba. We have no choice but to pay the fees to them. There should not be any monopoly on this.” The standard ‘meet and assist’ service provided by Marhaba costs AED90 per person, while the premium or ‘diamond service’ costs AED150 per person. Marhaba offers a discount for a group of over 10 people. Franca Jatzlau, contracting executive at Orient Tours added: “Costs are increasing in every aspect for us. It’s not a good thing. On the one hand Dubai wants to have a lot of tourists coming into their country; on the other hand they’re having these rules and regulations which are getting more and more from year to year. It’s not good for tourism.”

Destination management companies have slammed new rules at Dubai airport

In addition to the increased cost, DMCs argued that the new ruling means they cannot provide the service promised to their clients. “From the service side, when we are not

able to be there for our clients to provide them with the meet and assist it’s difficult. This is a challenge,” commented Hakim Al Budoor, chairman of Net Tours.

Doha’s new $14 billion Kuwait airport orders explosives scanner airport on track for 2011 AIRPORT OPERATIONS

The US$14 billion New Doha International Airport is still on track for completion by the end of 2011, Qatar Airways CEO Akbar al Baker has said, adding that the runways and the main terminal structure have already been finished at the airport, which will have a capacity of 24 million passengers in the initial phase.

Speaking at last month’s Bahrain International Travel Expo (BITE), Al Baker said the airline was committed to investments in new aircraft, new routes and improving airport infrastructure. “We are also investing in Doha’s existing airport infrastructure, while we await the opening of the new facility,” he told reporters.

New Doha International Airport will have a capacity of 24 million in phase one www.arabiansupplychain.com

CTX9000 scanners will detect biological, chemical or explosive devices in Kuwait

AIRPORT OPERATIONS

Kuwait International Airport has announced plans to install a hi-tech scanning device that can detect explosive devices, following a recent terrorist alert. Lieutenant Ibrahim AlRushaid, the undersecretary for ports security affairs at Kuwait’s Ministry of Interior’s (MoI), confirmed that the airport has invested in the new ‘CTX 9000’ scanning machine in order to increase detection of biological, chemical or explosive devices.

The action has been taken after Kuwait International Airport was put on high alert following information of a potential terrorist attack. “As a result, instructions were given to intensify the search procedures for passengers without exception,” said AlRushaid, who also revealed that the recent opening of five new departure gates, as well as increased private airline activities, had placed a greater amount of pressure on the airport’s security operations. June 2010

Still hungry for more news? The online home of:

for regular updates on the Middle East aviation industry WEBSITE STATISTICS

MOST TALKED ABOUT AVIATION COMPANIES ON ARABIANSUPPLYCHAIN.COM

Emirates Gulf Air Etihad Qatar Airways Dubai Airports

Kuwait Airways delayed by staﬀ reduction

MOST POPULAR HEADLINES

Kuwait Airways Corporation (KAC) has been forced to delay a number of flights after losing around 40% of its technical workforce to rival airlines, according to chairman and managing director Hamad Al-Falah. Approximately 90 employees from the corporation’s technical department have recently handed their resignations, Al-Falah told the Kuwait Times during an interview last month. “These employees made up 40% of KAC’s trained staff,” he stated. “This shortage, although it’s being remedied, has caused delays with departures.” With a series of increases in aircraft fuel prices, together with fierce competition in ticket costs, KAC made a total loss of around US$182.2 million last year, although it has announced plans to rent an extra Airbus A330 to cope with higher demand from passengers during the summer season, which starts next month. Al-Falah confirmed that the recent flight delays will not impact his plans to increase the frequency of routes to locations such as Lebanon, Damascus and Cairo during summer. “If we compare the KAC flight delays to other airlines, they’re still 96% less than those airlines,” he explained.

attack on Gulf Air flight

1 Passenger fakes heart

2 Qatar Airways lands B777 for unconscious passenger

3 Etihad pilots divert plane after medical emergency

4 Pilots handle mid-air plane damage on Oman flight

5 Emirates hunts for cabin

crew members in Abu Dhabi

EDITOR’S CHOICES PHOTO SPECIAL

VIDEO REPORT

Qatar Airways at Bahrain International Travel Expo CEO Akbar Al Baker reinforces a long-term commitment to growth with continued aircraft investment, improved airport infrastructure and new routes.

The World’s 8 Most Dangerous Airports View footage from some of the world’s most dangerous airports, which are famous for testing the skills of pilots while landing and departing their planes.

AVIATION BUSINESS SPOT POLL

Which Middle Eastern airline offers the best cargo service?

42% Emirates

21% Etihad

18%

Qatar Airways

11%

Royal Jordanian

8% Other

COVER STORY

Why the Japanese capital has whet the appetite of Emirates, Etihad and Qatar Airways in the Middle East. escribed as one of the three “command centres” for the world economy, Tokyo has featured on the wish-list of numerous airlines in the Middle East for several years now. Unfortunately, with space restrictions at Narita International Airport and limited Air Transport Agreements (ATA) between the Japanese government and its Gulf counterparts, the likes of Emirates, Etihad and Qatar Airways have traditionally struggled to launch their

June 2010

flights to the global metropolis. However, the expansion of Narita airport’s second runway in October 2009 worked in favour of bilateral negotiations, with an extra 20,000 flight slots being allocated to several countries around the world, including the United Arab Emirates and Qatar. Unsurprisingly, the news was welcomed with open arms by the UAE, as the launch of routes to Japan would capitalise on booming trade volumes between the two countries, which currently sits at around US$27 billion a year. In addition, more than 350 Japanese companies are operating in the UAE and approximately 3500 Japanese expatriates are living in the emirates.

The country’s flight allocations were shared between Emirates and Etihad, with the latter being the first to commence nonstop flights to Tokyo from its home base in Abu Dhabi. Its inaugural flight departed on 27th March 2010 and landed at Narita airport the following day. “Tokyo is a very important route for Etihad Airways,” James Hogan, CEO of Etihad Airways, told Aviation Business. “The opening of this route is yet another important milestone that signifies the strong social, economic, cultural and political relationships between the UAE and Japan. Our objective is to play an active role in developing the growth of

www.arabiansupplychain.com

COVER STORY

travel and tourism between the two countries wherever possible.” The airline is operating five non-stop flights per week to Tokyo, which are operated by three-class Airbus A330-200. The aircraft have been equipped with inflight services dedicated to the Japanese market, including a tailored menu, local IFE content and Japanese speakers and nationals within the cabin crew. “Our Airbus A330-200 aircraft has ten seats in diamond first class, 24 seats in pearl business class, and 160 seats in coral economy class,” he adds. “At this stage we have no plans to alter our fleet for this route. However, like all destinations, if demand increases significantly we will look at additional capacity.” Hogan is keen to build a steady stream of traffic throughout the year and has already noticed significant volumes between Tokyo and Istanbul, Doha and Abu Dhabi, which he expects to be constant throughout the year. “We are confident about receiving a strong interest on this route. Our current bookings have indicated a high demand from premium travellers, in particular business passengers. We also believe the increasing number of high profile attractions in Abu Dhabi will be very attractive to Japanese leisure travellers,” he states. While Etihad was the first Middle Eastern airline to operate to the Japanese capital, Emirates was not far behind, with its inaugural flight being received with a water canon ceremony at Narita airport on 28th March. “It was always our intention to operate non-stop between Dubai and Tokyo and that day has now arrived,” explains Richard Jewsbury, senior vice president of Emirates’ commercial operations in the Far East and Australasia. “We have already seen robust demand for the flights, following the announcement that we would be beginning our service, and this demand has remained since launch day. As a result, our seat load factor is expected to be over 80% in the first year and we would say that 70% of our passengers will be travelling in the economy cabin with the rest in the premium cabins.” Unlike the Airbus A330-200s being used by Etihad, Emirates is serving the route with its Boeing 777-300ER, which includes eight private suites in first class, 42 flat-bed seats in business class and 304 economy class seats. Jewsbury is not only confident about the success of this route for

www.arabiansupplychain.com

Our current bookings have indicated a high demand from premium travellers, in particular business passengers Emirates, but also the potential to expand its services to Japan in the future. “We have been operating to Japan since 2002 and understand the Japanese customer. The Emirates brand is well-known in the country and our service is appreciated by Japanese travellers,” he explains. “Our research shows there is sufficient demand for not only this new route, but the evidence suggests that we can definitely increase the frequencies. There is also the demand to sustain our Osaka-Dubai route, which enjoys independent traffic from the various regions in East, Middle and West Japan. We look forward to building on our partnership with the Japanese government and hope that Emirates will

be granted more flights to Tokyo and other destinations in Japan in the near future.” The potential market for Osaka and Tokyo flights has also been realised by Qatar Airways, which fulfilled its longstanding ambitions to fly to Japan’s capital city on 26th April 2010, when its first QR802 flight touched down at Tokyo’s Narita International Airport. The addition of Tokyo marks the airline’s second destination in Japan, with the carrier already serving Osaka. “This is a momentous occasion and Tokyo is certain to become a popular route on our ever growing network. With a large awareness of Qatar and Qatar Airways in the Tokyo market already, our flights

Etihad celebrates the launch of its flights to Tokyo

Emirates delegation greeted on arrival in Narita

Emirates EK318 was welcomed at Narita International Airport with a traditional water canon ceremony

June 2010

COVER STORY

introduced with full loads. We launched at an auspicious time in the Japanese calendar with our first flights coinciding with Golden Week, the biggest holiday period in Japan,” explains Akbar Al Baker, CEO of Qatar Airways. The new flights strengthen the relationship between Qatar and Japan, with both countries having close bilateral ties and enjoying growing trade. Qatar traded US$26.23 billion worth of oil, gas and other exports with Japan in 2008, contributing 11% of Japan’s total crude oil imports and almost 12% of Japan’s liquefied natural gas imports. In addition, there are currently over 30 Japanese companies operating in Qatar, with the Japanese community in Doha growing from less than 200 members six years ago to over 1100 in 2009. “Tokyo has been on our radar for several years, although there was previously a lack of accessibility into Narita and we were unable to operate any services,” continues Al Baker. “The completed extension at Narita Airport has opened the door for more carriers to serve the Tokyo market. We immediately seized the opportunity and we are now the only Middle East-based carrier operating daily flights to Tokyo.” Qatar Airways serves Tokyo using an Airbus A330 in a three-class configuration, with 12 first class, 18 business class and 208 economy class seats. “We offer more convenience for passengers as opposed to airlines offering only five services a week,” says Al Baker. “The daily service enables passengers to travel when it suits them, not when it suits the airline.”

ETIHAD AIRWAYS

Passengers and staﬀ at Doha International Airport ahead of Qatar Airways’ inaugural ﬂight to Tokyo

The airline expects to transport a combination of passengers on the route, with group traffic making up about 50% of the contribution, heading to popular Japanese holiday destinations across North Africa and Europe. It also expects considerable numbers of business traffic to the Gulf region, as there are many Japanese companies with operations not only in Qatar, but in other parts of the Middle East. “With Narita’s expansion, as well as Haneda opening up an international terminal later in the year, there is significant additional capacity in Tokyo

EMIRATES AIRLINE

with many airlines looking to capitalise on these upgraded facilities,” comments Al Baker. Future route development in Japan will happen in due course, he concludes, although in the meantime, Qatar Airways will look to enhance its existing operations to Osaka and Tokyo in order for the airline to offer the best service and convenience possible. “With close to 130 million people in the country, and one of the largest economies in the world, Japan presents exciting prospects for Qatar Airways and we look forward to strengthening our operations to this dynamic country.”

QATAR AIRWAYS

• Etihad Airways commenced non-stop ﬂights from its home base in Abu Dhabi to Tokyo on 27th March, becoming the ﬁrst Middle Eastern airline to operate to the Japanese capital.

• Emirates arrived in Tokyo on Sunday evening with its inaugural non-stop ﬂight on 28th March, following a day of celebrating all things Japan in Dubai.

• Qatar Airways ﬂight QR802 left Doha International Airport and touched down at Tokyo’s Narita International Airport on 26th April 2010.

• The airline operates five non-stop flights per week to Tokyo, in addition to the five flights per week it offers to Nagoya.

• The airline operates ﬁve non-stop ﬂights per week to Tokyo, on Monday, Thursday, Friday, Saturday and Sunday.

• Unlike Emirates and Etihad, Qatar Airways is operating a daily service between Tokyo and the Middle East.

• The flights are operated by three-class Airbus A330-200 aircraft and feature in-flight services dedicated to the Japanese market, including local in-flight entertainment content.

• Emirates serves the route using its Boeing 777300ER and passengers can enjoy the delicacies from the Japanese menu, while entertainment includes Japanese audio, TV and movie channels.

• Qatar Airways serves Tokyo with an Airbus A330 in a three-class conﬁguration. Passengers transiting through Doha in ﬁrst or business class can use the airline’s premium terminal.

• This aircraft is conﬁgured with 10 seats in diamond ﬁrst class, 24 seats in pearl business class, 160 seats in coral economy class.

• The aircraft has eight private suites in ﬁrst class, 42 ﬂat-bed seats in business class and 304 economy class seats.

• The aircraft includes a combination of 12 ﬁrst class seats, 18 business class seats and 208 economy class seats.

June 2010

www.arabiansupplychain.com

INTERVIEW: AIR ARABIA

Brighter

skies ahead

Air Arabia is emerging from the shadow of its illustrious neighbours with a business model that could change the face of the regional industry nnual general meetings are often viewed by fire-breathing shareholders as an opportunity to vent spleen at a row of nervous executives who would rather be back in their cosy offices. However, by contrast, Air Arabia’s AGM in March was a uniquely sedate affair; lders were wreathed shareholders iles, while executive in smiles, ents were greeted with statements d-clapping. enthusiastic hand-clapping. Why the good cheer from shareholders? Haven’t we all been told, by none other than the International IATA) itself, that the Air Transport Association (IATA) aviation industry suffered its worst year ever in 2009? hey have been paid,” “They are happy because they beams Air Arabia’s ebullient CEO Adel Ali, who is comfortably ensconced in his office at Sharjah orning after the AGM. International Airport the morning at Ali is pleased; the And there’s no wonder that fits dipped by 11.3% to headline news was that profi raordinary dividend that US$123 million. If the extraordinary the airline received in 2008 is removed from the mance last year books, Air Arabia’s performance was identical to its efforts in the previous ‘boom’ year. Shareholders received a generous al actually 10% dividend, which in total tal profits added up to more than the total ourse of the carrier made during the course 2009. Compare that to other airlines erence across the world, and the difference riers is startling. Established carriers ve from Asia Pacific to Europe have h been haemorrhaging their cash piles to an alarming extent. Granted, Air Arabia is a relatively new player at six years old, and is thus rapidly expanding its business in

June 2010

what was a non-existent market before the Sharjah low-cost firm’s arrival, but the strength and diversity of its offering has surprised industry analysts. “At the moment, we will probably grow our business at around 10-15% per annum,” Ali explains. “We have an expansion plan this year that will take us into a couple more points in India, and we’re also getting into Central Asia. But a greater focus will be on increasing frequencies into Turkey and intra-Gulf, which should take us to the end of this year.” In terms of profits for 2010, Ali is reticent, and not just because he is unable to reveal the targets of a publicly listed business. The number of variables facing the aviation sector in 2010 means that this year may well turn out to be just as uncertain as the last, despite the increased traffic across the board globally. “While we would like to achieve similar or better results [to 2009] but there is a current surplus of capacity in the marketplace, which is a challenge,” the CEO adds. “There’s a lot of unbalanced competition, and the oil price is still high, despite the huge amounts of surplus oil being stored around the world. The whole thing is very ambiguous in terms of how business will develop.” However, new destinations – Air Arabia now has 46 destinations from Sharjah and 12 from its new hub in Casablanca – are by no means the whole rate that Air Arabia is story. Last month, expected to grow the carrier received per annum its Air Operators Certificate (AOC) from the Egyptian Civil Aviation Authority, clearing

1015%

www.arabiansupplychain.com

INTERVIEW: AIR ARABIA

the way for the imminent launch of Air If another business opportunity comes Arabia ‘Egypt’, an Alexandria-based joint venture company with the Travco along, and smaller hubs add to what we’re Group, which is expected to start with flights to Khartoum and Kuwait. doing and becomes financially viable, While Ali confirms that these hubs will operate as standalone locations, and then of course we’ll look into it are not designed to feed traffic to each other, what the carrier is developing is possibly unmatched anywhere else on the globe. Given the four-and-awhere passengers can and becomes financially viable, then of half-hour flying range of the Airbus effectively opt to course we’ll look into it.” A320, the narrow-body aircraft of fly direct from city One benefit of the hub network is that Adel Ali’s position in the choice in the Air Arabia fleet, the to city? Ali pauses Air Arabia might never have to upgrade Arabian Business ‘Top 100 carrier has a network that could before answering. to the larger wide-bodied aircraft so Most Influential potentially encompass 80% of the “It’s possible – we beloved of the other Gulf carriers. Arabs 2010’ airports in the MENA region. “If have people’s money, Big is generally beautiful if you’re a you look at the Arab world generally, and while it’s important Middle Eastern airline; the GCC makes every airline has either a country or a that that investment is up a whopping 30% of the world’s city named in the brand,” Ali explains. not wasted, it’s also important that we aircraft order book. The majority of “We’re trying to change that, and to don’t sit on it,” he outlines. “Therefore, these aircraft dwarf the A320 in terms ensure that our customers don’t have the objective is to get to the lucrative of size; Dubai carrier and perennial to fly via specific cities to reach their areas – such as Egypt and Morocco Airbus-lover Emirates has ordered 58 final destinations.” – and those will take another year or A380 ‘superjumbos’, 38 more than the So perhaps the long-term vision for two to mature appropriately. If another type’s next biggest customer, Qantas. Air Arabia doesn’t involve a group of business opportunity comes along, and Meanwhile, Abu Dhabi’s Etihad and big hubs, rather a web of smaller hubs, smaller hubs add to what we’re doing Qatar Airways have invested heavily in

8th

www.arabiansupplychain.com

June 2010

INTERVIEW: AIR ARABIA

Boeing’s ultramodern 787 ‘Dreamliner’, and all three have bought into the future A350 as well. Ali confesses to a degree of envy when it comes to the bigger jets being ordered by his neighbours. “We looked at it [larger planes] briefly, and it’s tempting because you want to do everything,” he says. “But generally speaking, those carriers that wanted to do everything inevitably got it wrong.” But for now, Air Arabia is happy to let Air Asia test out the long-haul low-cost model, and Ali says he sincerely hopes it works out for the Malaysian carrier. “If it works well, there will be many more, and we may consider it too, but it’s not an easy option to mix the two working systems,” he remarks. “It’s one of those questions that frequently comes to mind, but you try to discourage yourself from thinking it.” The CEO has no doubt been consoled by a by-product of the recession, which has been the cancellation or deferral of jet deliveries by some carriers, leaving Air Arabia well-placed to capitalise by having its aircraft delivered faster than had been originally anticipated. Instead of having to lease A320s until 2012, when another 44 aircraft were due to start coming online, Ali reveals that the first planes in this particular batch will be handed over in October this year, at the earliest, which gives the fast-growing business a chance to move forward. On the more general level, Ali has some strong words about what he sees as incorrect priorities adopted by certain governments in the Arab world. However, the growth in competition, with eight LCCs plying their trade in the region since Air Arabia first blazed a path six years ago is not so much of a concern. “They [local LCCs] are all busy, but not all of them are successful,” indicates the CEO. “They’re all carrying people, and some are doing it for good reasons – to improve business, for example - but some are doing it simply because they love to have another airline.”

Adel Ali has confirmed that delivery of Air Arabia’s A320s will begin in October 2010, more than a year ahead of schedule

There is a hefty difference, as Ali points out, between those carriers that are private and even listed – such as Air Arabia – and those that are governmentbacked. The latter can generally afford to have lower yields due to the fact that they have access to substantial cashpiles and could be seen more as vanity projects than actual businesses. It’s those firms, Ali says, that won’t be forced to shut up shop during this recession. But at what price? “Obviously the legacy carriers will not close down because they are owned by governments,” he explains. “So probably instead of building hospitals and schools, they will buy more aeroplanes, in this part of the world.” It’s a controversial remark, and it’s also worth bearing in mind whether the low prices being offered to consumers now due to the high level of competition will be beneficial to those same clients

I hope that people look at this business not just as a marathon race to see who will have the biggest and most planes ... it seems like a race to fight for statistics June 2010

in the long run when carriers start to drop out of the market. “I hope that people look at this business not just as a marathon race to see who will have the biggest and most planes,” Ali indicates. “At the moment, it seems like a race to fight for statistics rather than taking care of the bottom line.” The topic of competition and the race for supremacy in the skies above the Arab world brings Ali onto another point – what he sees as a pervasively conservative element in business attitudes in the region. “We are not really risk takers when it comes to business, despite all the talk of entrepreneurism in this part of the world,” the executive says. “Every country tends to think it is cleverer than the next, and that is why I believe that not a lot of pan-Arab projects tend to succeed long-term. I believe that you have to take a bit of risk, gain that confidence and close those bridges, because if no-one does it, it will never happen.” Ali says this is largely to do with communities still preferring to operate within their own comfort zones, which explains why there is still a certain amount of resistance to foreigners doing business in Arab countries. “But anyone who comes to do business is good for the country,” the Air Arabia boss argues. “We went to Morocco and hired 100% Moroccan staff, and we will do the same in Egypt, plus paying taxes and working closely with a partner.” From a social perspective, Ali is being credited with a sea-change that has seen disparate Arab families come closer together simply by stepping on board an aircraft for the first time. It is this, perhaps more than anything else, which saw him place a strong eighth in the recent Arabian Business list of the 100 most influential Arabs in 2010. How does Ali feel about this kind of recognition? “At the top of any business, it’s lonely, but it’s good that someone is noticing what you are doing,” he says. “But this is really only the start. There’s still massive potential, as Egypt, Syria and Iraq are still untapped, and at some point geopolitical scenarios will change and markets will become unlocked. We’re in the same situation as Europe was eight or nine years ago, with too many airlines, a depressed market and some casualties. But then carriers bounced back and had their golden years and that’s what we are working towards.” www.arabiansupplychain.com

AVIATION BUSINESS MARKET REPORT

The end of

first class flying?

With the recession causing a dent in premium travel, airlines are opting to cut first class from planes altogether, but they could be turning passengers away for good

June 2010

www.arabiansupplychain.com

AVIATION BUSINESS MARKET REPORT

he days of ultimate luxury on flights could be fading for high-end spenders in the Middle East, as a severe drop in demand for first class travel has prompted airlines to actually remove the cabin from their aircraft. The trend was started last year, after a knock to the luxury travel market from the global recession. Data from IATA’s Premium Traffic Monitor in December 2009 showed that demand for premium travel was down a staggering 17% below 2008 levels, which implied the aviation industry had “effectively lost around six years of premium travel growth”. A similar report by Euromonitor International - entitled ‘Luxury Travel: Changing Travel Habits of the Elite’ - further highlighted the unprecedented drop in premium travel services since the global financial crisis, forcing airlines to slash their prices for first and business class tickets and create promotions to encourage top-end flight purchases. “The global economic downturn has shrunk demand for premium travel, and it is difficult to determine whether it will ever recover to the peaks seen in 2007,” the Euromonitor report explains. “Many airlines have changed the configuration of their planes to reduce the number of premium seats, and it is likely that a percentage of business travellers have permanently defected to the cheap seats.”

We model our cabin according to market requirements and see that demand for first class is more on long haul sectors, rather than and short haul routes customers,” adds Jose Thachil, marketing manager of Singapore Airlines in the Gulf. Other carriers are taking similar steps to reduce a reliance on first class. Earlier this year, Qantas announced plans to scrap two-thirds of its first class seating to make room for more economy seats on long haul flights, as part of a US$350 million overhaul. The carrier will reconfigure 29 aircraft, leaving first class on just 12 Airbus A380s. “Our assessment of longer-term travel trends, which pre-dates the economic crisis, shows that international premium travel demand is changing,” states Alan

CUTTING OUT FIRST CLASS In March, Singapore Airlines unveiled its brand new A330-300 in Abu Dhabi. The new planes replaced the older Boeing 777 for flights from the UAE’s capital to Singapore, as well as Singapore to Kuwait and Jeddah. Despite being a premium carrier, which has built up a favourable brand image for providing clients with luxury service (the airline was one of the first to introduce hot meals, free drinks, hot towels and personal entertainment systems for all classes), Singapore Airlines has chosen to ditch the first-class cabin on new planes altogether, designing them in a two-class, economy and business configuration. “The demand for first class has dropped in certain sectors, especially the medium haul sector. Last year, because of the economic downturn, there were a lot of changes in the travel policies of multi-national companies, which would choose premium travel,” comments Desmond Lim, Abu Dhabi manager of Singapore Airlines. “We have always modelled our cabin according to market requirements and we see that demand for first class is more on very long haul sectors, rather than medium and short haul routes, so we tailor our product accordingly.” The airline insists that the enhanced comfort of the business class section, with its lie-flat beds and iPod ports, will more than make up for a lack of The decline in demand for first class. “Although there is no first premium travel in 2009 class, the business class cabin offers a lot more comfort and luxury for our

17%

www.arabiansupplychain.com

June 2010

AVIATION BUSINESS MARKET REPORT

Joyce, chief executive at Qantas. “It is vital that we align this offering with forecast demand, which is expected to be relatively slow compared to business, premium economy and economy.” Doha-based Qatar Airways, known for the high standards of its premium cabins, which feature a stand-up bar, cream leather sofas and teak tables with lampshades, also announced plans to eliminate such luxuries from planes scheduled for delivery. Chief executive officer Akbar Al-Baker told delegates at the recent ITB conference about plans to gradually replace its first-class cabins with business-class seats on a number of future aircraft, including 18 Boeing 777s. “We have made this decision as we will introduce an outstanding new business class in 2011,” says Al-Baker.

Etihad is confident that premium travellers will return as global markets return to strong trading conditions

really a pity that Singapore Airlines has taken this step, especially as people from this region really value these services. Maybe they are doing the right thing in the short-term, but I would say for LOSS OF LONG TERM BUSINESS? this market, they are losing out on a lot of long-term clients.” While the recession has made a serious dent in the demand for There are still some carriers that agree with this sentiment. premium air travel, not everyone believes that scrapping first class Gulf airlines Emirates and Etihad have bucked the budget trend is the way forward. Natalie Matteus from luxury travel company altogether to launch lavish new premium cabins (Etihad was Odysseus Deluxe Travel Collection says the move could recently awarded ‘Best First Class’ at the World Airline be detrimental to long-term business for airlines. Awards) and neither airline has reported plans to cut Odysseus, which caters to high net worth travellers, back on its first class offering. has reported that its own data reveals a slight fall “We have an excellent and very competitive in the use of business class, but not in first class. premium class offering, and our first and business “People who can afford to travel first class will end cabins continue to be an important part of our years of premium travel up changing to other airlines that offer this service. product mix,” says Ahmed Khoory, Emirates’ senior growth was lost due to There are only a handful of airlines that offer vice president of commercial operations in the Gulf the global recession a first-class service and these are seen as the very region. “We have no plans to reduce the number of first best airlines. First class should always be on offer and business class seats offered in our existing cabins.” for long haul travel and for Middle East and Far East Peter Baumgartner, chief commercial officer at Etihad, markets,” explains Matteus. confirms the airline has a similar approach. “We take a longer, “It’s a matter of vision and reputation. Skipping your best more strategic approach to the cyclical aviation industry and are service might offer some short-term profits, but in the long run confident that premium travellers will return as global markets those who invest in first-class will benefit more,” she adds. “It’s return to stronger trading conditions,” he states.

SIX

Etihad won the ‘Best First Class’ category at last month’s Skytrax World Airline Awards in Hamburg

June 2010

www.arabiansupplychain.com

SHOW REPORT: ARABIAN TRAVEL MARKET ATM 2010

ARABIAN

TRAVEL

MARKET arketed as the Middle East’s premier travel and tourism event, last month’s Arabian Travel Market (ATM) 2010 attracted the attention of various regional and international airlines, who continued to lend their support for the annual event, despite a market slowdown from the global recession. Indeed, with the industry experiencing its first green shoots of recovery, ATM’s organiser Reed Travel Exhibitions was able to report an increase of 1% in first day visitor numbers compared to the previous year, and more than 4% over 2008 levels, which it deemed “a clear indication of both the event’s and the Middle East’s strategic importance to facilitating industry recovery”. In addition, quality visitors - which represent hosted delegates and ‘buyers club’ members with considerable on-

June 2010

With participation from the likes of Emirates, Etihad, Qatar Airways and Oman Air, this year’s Arabian Travel Market (ATM) was a successful platform for bringing together the Middle East’s leading airlines.

the-spot purchasing power and decision travel and tourism sector, including tour making capabilities - had risen by more and hotel operators, car rental companies than 3%, while VIP figures, which and international tourism boards. includes dignities and ministers, “As one of the most critical swelling by 12% over the editions in Arabian Travel 2009 figures. Market’s 17-year history, “Even before the show the introduction of several opened, Arabian Travel new initiatives, such as our increase in visitors numbers Market already witnessed expanded seminar programme, ed par at this year’s ATM com positive consolidation of brought added value to all es gur fi to 2008 exhibitors and stand-sharers, participants as an event that and a record 72 participating not only serves as a platform to countries, which included more announce new initiatives and projects, than 60 new-to-market representatives,” as well as promote enhanced inbound and comments Mark Walsh, group exhibition outbound tourism products, but also to director at Reed Travel Exhibitions. further enhance industry knowledge about “More importantly, such growth figures strategies and issues that were thoroughly were strongly reinforced by the increased presented and discussed by well-renowned number of visitors, which translated into industry experts,” adds Walsh. an equally significant increase in business Held under the patronage of His activity to the benefit of exhibitors. Highness Sheikh Mohammed Bin Emirates, Etihad, Qatar Airways and Rashid Al Maktoum, vice president and Oman Air were amongst the exhibitors at prime minister of the UAE, Arabian this year’s event, which provided a key Travel Market will return to the Dubai platform for Middle Eastern airlines to International Conference and Exhibition network with their trade partners in the Centre (DICEC) in May 2011.

www.arabiansupplychain.com

SHOW REPORT: ARABIAN TRAVEL MARKET ATM 2010 SHOW ROYAL JET Celebrating its seventh anniversary, Royal Jet - the Abu Dhabi-based international luxury flight services company, chaired by His Excellency Sheikh Hamdan Bin Mubarak Al Nahyan - launched the ‘100 Club’ corporate relationship programme at Arabian Travel Market 2010. “Prospects for the region as a whole look promising, with green shoots of recovery evident in many sectors in the first quarter of this year, leading to organic growth overall,” states Shane O’Hare, president and CEO of Royal Jet. “Our presence at Arabian Travel Market 2010 provided us with a valuable platform to sustain the company’s growth trajectory, whereby being amongst the industry’s key players from across the globe allowed us to keep the market abreast about Royal Jet’s global benchmark for in-flight luxury through the combination of cutting-edge technology and unmatched opulence.” The launch of Royal Jet’s ‘100 Club’ was perfectly timed for ATM 2010 and O’Hare reported a number of promising leads for the initiative. “This year’s Arabian Travel Market served as a fitting venue for us to launch our new initiative, which allows all customers, from individuals to corporates, to profit from an attractive range of benefits and take cost-effectiveness and efficiency of private jet travel to another level,” he concludes.

QATAR AIRWAYS Amongst a number of leading international airline operators from the region who constantly participate at Arabian Travel Market was Qatar Airways. “We were delighted to exhibit at Arabian Travel Market this year, which is clearly the region’s premier travel and tourism event,” says Akbar Al Baker, chief executive officer of Qatar Airways. “It is important we maintain and step up our presence each year to reflect the continuous growth we have, are having, and will have as part of the airlines’ strategy to be the leading player in the global aviation industry.” Qatar Airways used this opportunity to showcase its award-winning hospitality and promote its new destinations for 2010 - Bangalore, Copenhagen, Ankara, Tokyo, Barcelona, Sao Paulo and Buenos Aires, Al Baker told Aviation Business.

Qatar Airways promoted its new routes at ATM 2010

ETIHAD Etihad Airways showcased its destination management company Hala Abu Dhabi for the first time at Arabian Travel Market

Royal Jet president and CEO Shane O’Hare (above)

www.arabiansupplychain.com

James Hogan and the team at Etihad’s ATM stand

Emirates’ stand included a 9.5m tall rotating globe

EMIRATES As the official airline of Arabian Travel Market, Emirates turned a lot of heads at the exhibition with its stand – a rotating globe measuring 9.5 metres in height with a circumference of 65 metres. “ATM plays an integral role in the growth of the travel and tourism industry every year, but in 2010 - as key players from every sector seek ways to build business in testing times - it had an even more important part to play,” explains Richard Vaughan, Emirates’ divisional senior vice president of commercial operations worldwide. “As we focus on expanding our network with new routes, Emirates saw ATM as a tremendous opportunity to raise awareness of these destinations. It was also a superb platform to investigate further growth opportunities and put in place building blocks for future development.”

this year, with a focus on its sponsorship of the Formula 1 Etihad Airways Abu Dhabi Grand Prix. The stand also featured the airline’s first and business class seats and services, alongside a Teppanyaki kitchen with two world-class Japanese chefs, preparing traditional meals throughout the event to celebrate Etihad’s newest longhaul destinations to Tokyo and Nagoya. “Etihad is playing a vital role in attracting visitors to Abu Dhabi and the UAE,” says Peter Baumgartner, chief commercial officer at Etihad Airways. “The showcase of our products and services highlighted the high quality of the end-to-end travel experience that we offer customers across our expanding network.”

June 2010

SHOW REPORT: ARABIAN TRAVEL MARKET ATM 2010

TURKISH AIRLINES As a new-to-market exhibitor, Turkish Airlines used this year’s Arabian Travel Market participation to enhance its brand presence, raise further awareness and reach out to more clients in the Middle East. “With so many airlines exhibiting this year, Arabian Travel Market has been a positive experience for us, as we were able to see how our competitors are acting in the market place. At the same time, this situation helped the public become more aware of the aviation sector in general,” states Ayse Misirli Mirza, Dubai and Sri Lanka director at Turkish Airlines. “Our participation was very worthwhile, as we met the right people in a business focused environment. It has indeed been very fruitful for us.”

SAFI AIRWAYS With a bright forecast for growth in the Afghanistan aviation sector, Safi Airways held a press conference at this year’s Arabian Travel Market to announce its planned acquisition of two Airbus A320s this summer, the first of which will be operated on the Dubai – Kabul route. The aircraft will be liveried in Safi’s new corporate branding, which was also unveiled to reporters and visitors at the exhibition. “The entire team has worked hard to achieve the turnaround of Safi

NASAIR A relative newcomer to Arabian Travel Market, Nasair used its presence at the exhibition to announce a new partnership with Booking.com, Europe’s largest online hotel reservation service. As a result, passengers of the Saudi Arabian airline now have access to Booking.com’s inventory of over 57,000 hotels in more than 15,000 destinations across Europe and beyond. “Nasair is offering added

value for its passengers, who will be able to get access through booking.com to the best hotel accommodation in Europe,” says Waleed Al Sheik, Nasair’s marketing and corporate director. The airline also signed a deal for aircraft training with the Middle East Academy of Aviation on the third day of ATM. The agreement has been designed to develop a new generation of technically qualified young Saudis to work in civil aviation.

June 2010

Airways during 2009 and we achieved our goal,” reflects Rahim Safi, chairman of Safi Airways. “The airline has been making a small operational profit for several months now and the future looks even more promising. We therefore decided there was a need to place newer aircraft into service, so we plan to introduce the A320s to our fleet from the end of June 2010. This will enable us to improve passenger convenience and utilise the crew and maintenance advantages of having an A320/A340 fleet.”

OMAN AIR Oman Air reported a large number of visitors for its stall at Arabian Travel Market, including government officials, tour operators, partners and customers. “We have received a positive amount of enquiries and the event has enabled us to successfully raise awareness of our product offerings, as well as promote our new destinations for 2010,” comments Philippe Georgiou, chief officer for corporate affairs and official spokesperson for Oman Air. “We took this opportunity to highlight our long-term growth commitment, destination expansion and product development. We were also able to promote the high quality of end-to-end travel experience for customers across our expanding network.”

www.arabiansupplychain.com

SHOW REPORT: ARABIAN TRAVEL MARKET ATM 2010

PHOTO SPECIAL: ATM

the number of countries represented at ATM 2010

www.arabiansupplychain.com

June 201 2010 0

SHOW REPORT: ARABIAN TRAVEL MARKET ATM 2010

2011

ATM will return in May next year

June 2010

www.arabiansupplychain.com

The market leader in mass door-to-door distribu�on and controlled bulk distribu�on of magazines within the UAE.

Tailor made distribu�on

Distribu�on 100% controlled

Comprehensive in-house

A full solu�ons package

solu�ons to suit your

by Blue Truck employees

audit and repor�ng

including;

requirements

(no external management

structure - We also

Design

or distributors)

welcome external audits

Photography

from the company of

Prin�ng

your choice

Distribu�on

+971 4 282 6333

Associate member

SPECIAL REPORT: TOP 20 GLOBAL AIRPORTS

TOP 20

SPECIAL REPORT:

GLOBAL BAL AIRPOR A RPORTS Skytrax has announced the top 20 winners of its annual World Airport Awards, which are based on the results of 9.8 million questionnaires completed by airline passengers in 2009/2010, covering more than 210 airports worldwide.

1 SINGAPORE CHANGI AIRPORT Voted the top airport in the world, Singapore Changi also received the Skytrax trophies for Best Asian Airport and Best Airport Leisure Amenities in 2010. Known as the gateway to

June 2010

2 Singapore and one of the largest airports in Asia, Singapore Changi has hosted passenger and cargo services for over 40 airlines, including Singapore Airlines, Jetstar Asia, Tiger Airways, Silk Air, Qantas and Valuair.

INCHEON INTERNATIONAL AIRPORT Owned by the government, Incheon International Airport is the largest airport in South Korea and one of the largest in the world. Hosting passenger and cargo services for over 40 airlines, including Korean Air, Asiana Airlines and Polar Air Cargo, Incheon was second in the global Skytrax ranking, but managed to win Best International Transit Airport and Staff Service Excellence across Asian Airports.

www.arabiansupplychain.com

SPECIAL REPORT: TOP 20 GLOBAL AIRPORTS

HONG KONG AIRPORT Opening in 1998 to replace Kai Tak, Hong Kong International Airport is located on the island of Chep Lap Kok and remains the main gateway to Hong Kong. One of the largest airports in the world and hosting regional and international services for over 40 airlines, Hong Kong International Airport is a hub for the likes of Cathay Pacific, Dragonair, Hong Kong Airlines and Hong Kong Express Airways.

5 4

KUALA LUMPUR AIRPORT Kuala Lumpur International Airport is one of South East Asia’s largest airports. Located in Sepang, it hosts over 40 airlines, such as Malaysia Airlines, Air Asia and Air Asia X. Kuala Lumpur improved its position in 2010, ranking fifth in the world, as well as being named Best Airport Immigration Service and collecting a Staff Service Excellence Award.

MUNICH AIRPORT Munich Franz Joseph Strauss Airport is the main gateway to Munich and one of the largest airports in Germany. Hosting domestic, regional and international services for over 35 airlines, including Lufthansa and Condor, Munich Airport jumped to the fourth position in this year’s global airport ranking, while also receiving the title of Europe’s Best Airport.

6 7 ZURICH AIRPORT Zurich Airport, also known as Kloten Airport, hosts domestic, regional and international services to over 40 airlines, including the likes of Swiss International

www.arabiansupplychain.com

Airlines, Air Berlin and Edelweiss Air. Ranked at number six in the Skytrax list for 2010, Zurich Airport also picked up the awards for Best Airport Terminal Cleanliness and Best Baggage Delivery.

AMSTERDAM SCHIPHOL AIRPORT Operated by the Schiphol Group, Amsterdam Airport Schiphol is the main international airport of the Netherlands and one of the largest airports in Europe. Schiphol hosts passenger and cargo traffic from over 50 regional and international airlines and acts as a hub for airlines including KLM and Martinair. In addition to being ranked at number seven in 2010, it was also named Best Airport in Western Europe by Skytrax.

June 2010

SPECIAL REPORT: TOP 20 GLOBAL AIRPORTS

AUCKLAND INTERNATIONAL AIRPORT Auckland Airport is the largest airport in New Zealand and the main gateway for the city of Auckland. Hosting passenger and cargo services for over 20 airlines, Auckland Airport is the primary hub for Air New Zealand and continued its upward swing in 2010 with a number nine ranking. It also received the Skytrax awards for Staff Service Excellence and Best Airport Australia / Pacific.

8 BEIJING CAPITAL AIRPORT Operated by the Civil Aviation Administration of China (CAAC), Beijing Capital International Airport is the main aviation hub for the Chinese capital, and one of the busiest airports in the world. Hosting domestic, regional and international traffic for over 50 airlines,

BANGKOK SUVARNABHUMI AIRPORT Suvarnabhumi Airport was opened in 2006 to replace Don Mueang Airport and is the main international gateway to Bangkok. Hosting domestic, regional and international passenger and cargo traffic from over 40 airlines, the airport is a hub for airlines including Thai Airways, Bangkok Airways and Thai AirAsia.

June 2010

Beijing Capital Airport is home to airlines such as Air China, China Southern Airlines and Hainan Airlines. It was one of the key improvers in this yearâ&#x20AC;&#x2122;s Skytrax ranking, moving into the worldâ&#x20AC;&#x2122;s top 10 for the first time, whilst also receiving the Best Airport China Award and Best Airport Security Processing Award.

KANSAI INTERNATIONAL AIRPORT Kansai International Airport is located on an artificial island in the middle of Osaka Bay, 38km southwest from Osaka Station in Japan. Ranked at number 12, it should not be confused with Osaka International Airport, which is closer to the city and now handles only domestic flights.

VANCOUVER INTERNATIONAL AIRPORT Vancouver International Airport is one of the busiest airports in Canada. Hosting passenger and cargo services for over 35 airlines, the airport is a hub for Air Canada, Air Canada Jazz and Air Transat. In addition to being ranked at number 11 in the Skytrax ranking, it was deemed Best Airport North America.

www.arabiansupplychain.com

SPECIAL REPORT: TOP 20 GLOBAL AIRPORTS

13 CHUBU CENTRAIR AIRPORT Chubu Centrair International Airport is the main gateway to Nagoya and the Chubu region of Japan. Hosting domestic, regional and international passenger and cargo services for over 20 airlines, the airport is a domestic hub for ANA Airlines.

HELSINKIď&#x161;şVANTAA AIRPORT Operated by Finavia, Helsinki-Vantaa Airport is located in Vantaa and is the largest airport in Finland. Hosting services for over 20 airlines, including Air Finland, Blue1 and Finnair, Helsinki-Vantaa Airport was ranked at number 14 on the global Skytrax list and was also named Best Airport in Northern Europe.

Gateway Easy Check-in

Friendly Logistics Hub

COPENHAGEN KASTRUP AIRPORT Copenhagen Kastrup Airport is the main international gateway to Copenhagen and the Oresund region in Denmark. Hosting domestic, regional and international passenger and cargo services for over 30 airlines, Copenhagen Kastrup is the major hub for airlines such as Scandinavian Airline System (SAS), Transavia, Cimber Sterling and Norwegian Air Shuttle. The Skytrax survey ranked Copenhagen Airport at number 15 and it also received the Staff Service Excellence Award for European Airports.

www.arabiansupplychain.com

Safe and Secure Cargo Facilities

Tech Stops

Easy Access

Duty Free Shopping

Ample Aircraft Parking 24 Hours Open

www.rakairport.com Email: marketing@rakairport.com Tel : +971 7 2448111 Fax: +971 7 2448199

June 2010

SPECIAL REPORT: TOP 20 GLOBAL AIRPORTS

FRANKFURT MAIN Operated by Fraport, Frankfurt Am Main Airport is a major international gateway to Frankfurt and one of the busiest airports in Europe. Ranked at number 16, it hosts domestic, regional and international passenger and cargo services for over 40 airlines, including Lufthansa, Condor and Air India.

NARITA INTERNATIONAL AIRPORT Narita International Airport is the main gateway to Tokyo and the busiest airport in Japan. Hosting domestic, regional and international passenger and cargo services for over 40 airlines, the airport is a major hub for airlines including ANA, Japan Airlines and Northwest Airlines.

BRISBANE AIRPORT Brisbane Airport is the gateway to Brisbane, the Queensland capital and one of the busiest airports in Australia. Owned and operated by Brisbane Airport Corporation, the airport host domestic and international passenger and cargo services for over 25 airlines and is the hub of Virgin Blue and Pacific Blue.

19 20 CAPE TOWN AIRPORT Cape Town International Airport (CTIA) is the second busiest airport in South Africa after Johannesburg. Hosting domestic, regional and international passenger and cargo services for over 20 airlines, CTIA is

June 2010

a hub for South African Airways. It was a double winner at this yearâ&#x20AC;&#x2122;s Skytrax World Airport Awards, collecting the Best Airport Africa title, as well as walking off with the Airport Staff Service Excellence Award for Africa.

SAN FRANCISCO AIRPORT San Francisco International Airport was the final entry in Skytraxâ&#x20AC;&#x2122;s Top 20 Global Airport ranking. It hosts domestic, regional and international passenger and cargo services for over 30 airlines, including United Airlines and Virgin America.

www.arabiansupplychain.com

INTERVIEW REICHLE AND DEMASSARI R&M

The Right

Connections

Swiss cabling specialist Reichle and De-Massari (R&M) is on hand to ensure the Middle East’s airports stay connected or many of us, the scenario of being at an airport with no internet or mobile reception is unthinkable. It is hardly a surprise that, in the competitive world of aviation, passengers are now rating network connectivity as highly as the comfort of the flight itself. With the development of communication technology charging at full-speed ahead, airports have to ensure that they are constantly up-to-date to enable passenger communication with the outside world during transit. Unseen, and yet at the very heart of this, is the silent ‘invisible infrastructure’ of passive cabling that ensures a network’s success. As the roots to the network, an effective cabling solution can dictate the success or failure of even the best communication systems. Swiss cabling expert, Reichle and De-Massari (R&M), is well aware of this fact and has made ensuring as smooth and trouble-free a connection as possible its priority. Operating globally in over 30 countries with headquarters in Switzerland, the company’s Middle East and Africa regional head office is located in Dubai, with additional bases in the Kingdom of Saudi Arabia, Egypt and Jordan.

As its core business, the company has built up a stellar reputation for developing and delivering cabling solutions for communication networks, particular with its copper and fibre optical products. With the airport sector witnessing a healthy growth in passenger volumes, together with a demand for better network services, R&M sees enormous opportunity to tap into the sector and help airports seek innovative network infrastructures to increase the reliability and quality of their airport systems. “Airports are a very interesting environment,” Jean Pierre Labry, managing director of R&M in the Middle East and Africa, stresses. “As a public environment, the reliability and security of the connectivity is essential.” Although R&M works in a diverse number of markets, such as banking, hospitality and other types of transportation systems, the growing number of airport projects in the Middle East has predictably caught its attention. With extensive experience of kitting out some of the world’s major airports with its latest cabling solutions, the company brings considerable talent and expertise to the Middle Eastern table. It has recently completed extensive cabling network implementations at various international airports including Paris, Geneva, Basel, Nuremberg, Incheon (Korea), Egypt and Sudan.

Airports are no longer just a gate for travelling, but much more than this

June 2010

With the Middle East’s airport sector set to continue its considerable expansion despite the after-effects of the recession, R&M is now turning its attention to this potential lucrative region, hoping to lure it with a promise of high-performance data cabling. The increase in passenger traffic around the globe, coupled with the demands of today’s hectic passengers, has led to the desire for even better highperformance data cabling in airports. “At the airport, passengers want more connectivity,” agrees Labry. “This connectivity has to be secure and in an environment where you can easily connect your laptop or your mobile phone.” It is not just about emails back to the office or calls to loved ones either. As he points out, today’s airports are no longer somewhere where you simply wait for a plane. “There are banks, hotels, food courts and a lot of other services available to the passenger. Airports are no longer just a gate for travelling, but much more than this,” he says. Referring to its passive cabling solutions as being the ‘backbone of the airport communications infrastructure’, the company’s extensive fibre and copper airport product portfolio aims high. As well as incorporating the most innovative product features to enable an countries in which optimised network Reichle and De-Massari performance, it (R&M) operates promises both ease of installation and the

www.arabiansupplychain.com

INTERVIEW REICHLE AND DEMASSARI R&M

highest security standards. To meet the modern world’s growing network security requirements, R&M offers a three-level security system for its fibre and copper connectors. As expected, all components are Swiss engineered, compliant to next generation network transmission speeds and the latest OS2 standards. “What we stand for is quality and reliability and these are the key benefits that airport operators look to ensure the consistency and reliability of their connected systems,” emphasises Labry. “Airports cannot afford downtime or an unreliable system because of the increase in both passenger traffic and their demands.” Adhering to the highest level of quality as stipulated by international standards, R&M provides completely modular systems that enable airport staff

to easily facilitate changes and However, Labry argues developments as and when that the fact remains whilst required. “What makes us active equipment such as different is that we are not computers and servers have just setting up a box. Our a much lower life span of end users want more than up to five years, the highest The number of years that just a product,“ says Labry. standards of cabling can airport cabling can last “What they are looking for is have the airport set for nearly quality, reliability and security, a quarter of a century. “It is with added value and local support. better to have a good highway We bring flexibility and customisation from the start, rather than something whereby using our techniques and that is more or less OK but when it goes expertise, we can tailor the product to the wrong, is difficult to change. I think a needs of the customer.” Having such a lot of [customers] are more interested modular system is extremely important in in the quality than just on saving a few airport development projects, particularly thousand dollars,” says Labry. as cabling can last for more than 20 years, Having badly planned and lower a time-span during which tremendous cost cabling systems in place may in fact changes in network technologies and end up costing the airport considerably needs can occur. more in terms of slow network traffic,

Airports cannot aﬀord downtime or an unreliable system because of the increase in both passenger traﬃc and their demands As the cabling can be in place for such a long-term period, the process of set-up requires a very high level of expertise and experience so that future planning can be taken into account for the airport. Airport operators, however, may be reluctant to justify spending large sums on high-end cabling, when lower cost alternatives are available in the market.

www.arabiansupplychain.com

inefficiencies and even connection failures leading to data loss. “Airport operators could see passengers making choices in the long-term to avoid an airport that cannot provide for their needs,” warns Labry. “An intermittent service for example is as good as no service at all. With airports in this region all vying to become the hub for the Middle East, it is important to insure that all the best services are available to attract people to come through a particular airport.” Labry is confident that R&M’s airport cabling product portfolio can avoid this scenario, by providing scalable solutions with forward looking designs and modularity, while extending the life of a key part of the infrastructure. For this reason, the service comes with the added benefit of a 20 year warranty. For airport operators, he firmly believes, this can only mean optimised performance and cost savings in the long-term. So has Labry managed to convince the Middle East’s ambitious airport project developers with his strong argument in favour of high-end cabling? He admits that the company has been approached

June 2010

INTERVIEW REICHLE AND DEMASSARI R&M

R&M AIRPORT PORTFOLIO A selection of some of R&M’s recent airport projects around the world.

by some of the region’s major airports, but does not elaborate further. Still, R&M is hugely excited by the potential in the region. “A recent study showed that there are 12 major airports across the Middle East which are ready to invest US$86 billion in expanding and upgrading their infrastructure to handle future passenger flow,” Labry says enthusiastically. “R&M expects to play an active role in this expansion and we are ready for it.” Gearing up for its conquest of the region, R&M has de-centralised many of its core functions and kept critical aspects of the business at a local level – including marketing, technical support

and importantly, supply chain processes. To further buoy up local support as a key ingredient of R&M’s success, the company launched a training academy two years ago at its Middle East HQ, to enable its partners and staff to undergo intensive training on its products. “It is not possible to find an R&M product on the shelves anywhere – it comes from partners that have been certified and trained,” ends Labry. “This is how we can guarantee the quality of the installation and not only the quality of the product. That is what makes us successful in the region in that we don’t compromise on quality.”

THE CAT. 6A CONNECTOR Andrew Sedman, R&M Middle East and Africa’s technical director, shares some technical know-how about the company’s latest cabling advancement, the Cat. 6A connector. What is the Cat. 6A connector? R&M’s new Cat. 6A connector provides outstanding performance for signal transmission, plus generous headroom for demanding applications in the range of 10 Gigabit Ethernet (10 Gb/s) and beyond. The end user is therefore guaranteed greater bandwidth, transmission quality and operating reliability, which can provide scope for future applications. What would you say to potential clients such as airport operators that may be deterred by the perceived high cost of high-end cabling? Typically a cabling solution represents something like 5% of an IT budget for a new build project. When you extrapolate

June 2010

and consider that cabling is expected to last 20 plus years, the active equipment is typically going to last only ﬁve years before it requires replacing. To try and cut costs on the passive infrastructure, which is the sole method by which all of this active equipment needs to be able to communicate, would be a folly decision. How is the Cat. 6A connector useful for the aviation industry? The category 6A connector provides excellent reliability and for very little chance of impact by the engineers doing the termination of a performance overall. This provides for a great deal of performance for very high data rates, which is key for this sector.

Geneva Airport To meet increasing requirements, a new computer centre was commissioned in 2007, for which R&M supplied the structured cabling, complete with all components. The external electromagnetic influences and other interference encountered at Geneva Airport placed very high demands on the network. The shielded cabling prevented a negative impact on the reliability of data transfer. Nuremberg Airport The operators of Nuremberg Airport commissioned R&M to install the network in the new Transfer Control Terminal (TCT). R&M developed specially constructed, break-proof, closed aluminium housing for Nuremberg Airport within just two weeks. Incheon International Airport One of the biggest challenges to potential suppliers was to lay the new network through the tunnel of an underground shuttle. The choice fell on the R&M cabling system VS Compact, as it is particularly suitable for use in confined spaces and it is known to be easy and practical to install. In addition, R&M offers special products for the protection of cabling against dust and humidity up to protection class IP67. Galerie Parisienne The boarding satellite at Paris’s Charles de Gaulle Airport was specially designed for the Airbus A380. The customer chose the shielded Cat. 6 solution because this product was able to satisfy the requirements of high performance and operating security.

www.arabiansupplychain.com

MRO MARKET REPORT

With Middle Eastern airlines operating a growing number of aircraft, the region has created a lucrative playing field for m maintenance, repair and ov overhaul (MRO) suppliers, w with a predicted spend of US$4.8 billion by 2019.

June 2010

www.arabiansupplychain.com

MRO MARKET REPORT

lthough demand for aircraft maintenance, repair and overhaul (MRO) services has continued to decline since the global recession, a report published by the UK-based consultancy firm Aerostrategy has predicted an imminent return to growth. And with billions of dollars being invested in fleet expansions by Middle Eastern airlines, the region’s growth potential has been highlighted to MRO suppliers throughout the world. According to AeroStrategy’s research, demand for MRO services from Middle East airlines will increase by 7.6% a year for the next decade, compared to an estimated growth of 3.2% in the global market. This brings the total spend in the region to US$4.8 billion by 2019. “Middle Eastern airlines have taken delivery of a large number of aircraft over the past decade and this fleet growth translates into strong MRO growth, so suppliers serving the region will likely see greater growth rates here than in other parts of the world,” explains Richard Brown, senior associate at AeroStrategy. “For example, the Middle East has approximately 1450 commercial aircraft in service, and, a further 1300 aircraft on order. Middle East airlines generate 5% of the commercial MRO maintenance market and the combination of a large number of aircraft deliveries, particularly widebody aircraft, and fast growth in a short time compared to more mature markets, such as Europe or North America, has generated faster market growth than the global average.” Falling from a peak valuation of US$45 billion in 2007, the global MRO market was valued at $42.7 billion last year, marking a drop of $2.3 billion. However, Aerostrategy believes the sector will experience low single-digit growth in 2010, followed by mid single-digit growth in 2011 and low double-digital growth in 2012. “Strong MRO growth from any market is attractive to MRO suppliers and the Middle East is no exception. There are clearly opportunities in the areas of component repair, aircraft modifications, and engineering and technical services. Several component manufacturers, such as Goodrich, have established inregion component repair facilities to be closer to their Middle East customers – something Middle Eastern airlines value,” continues Brown. “Many of the region’s airlines have existing in-house airframe maintenance infrastructure in place and have also signed long-term engine maintenance deals with the engine OEM, so there may be less opportunities in the near-term in these areas.” At present, around 60% of Middle Eastern airframe MRO is outsourced, while 40% is performed in-house. However, engine MRO has proved a different story in the region, with approximately 95% of engine maintenance outsourced by airlines to an external supplier. “The trend globally is for more maintenance to be outsourced as airlines focus on cost reduction and benefit from a competitive maintenance supply base. However, this does depend on the airline’s maintenance philosophy. New start-up carriers, such as Kuwait’s Jazeera Airways, have been strong supporters of outsourced maintenance from the start, whereas more established legacy carriers such as Saudi Arabian Airlines have been strong supporters of keeping maintenance in-house within the airline as far as possible,” says Brown. “However, there are signs that even the staunchest supporters of in-house maintenance have been outsourcing maintenance to take advantage of competitive market prices. Even so, some airlines have been building up their

www.arabiansupplychain.com

Middle Eastern airlines have taken delivery of a large number of aircraft and this translates into strong MRO growth in-house capability, so have actually in-sourced MRO work that had previously been outsourced.” Maintenance suppliers such as ADAT (former GAMCO), JorAMCo, Lufthansa Technik, Egyptair, Turkish Technics and Alsalam are some examples of recent beneficiaries of outsourced maintenance, along with the engine and component OEMs. Furthermore, the ownership of SR Technics, the Zurich based fullservice maintenance provider, by Mubadala provides synergies with ADAT and opportunities for ADAT to expand its capabilities and offerings within the Middle East and beyond. “The leading independent MRO supplier in the region is Abu Dhabi Aircraft Technologies (ADAT) – the former GAMCO. Benefiting from ownership by Mubadala, ADAT has embarked on major investment in its facilities and capabilities, including a new A380 hangar and engine maintenance capability via agreements with engine OEMs such as GE,” admits Brown. “Many of the region’s MRO suppliers have traditionally been the in-house maintenance arm of the parent airline – such as Saudi Arabian Airlines – and they are transiting to offer more third party services to the airlines seeking to take advantage of the lower labour costs of the Middle East. There is still a shortage of in-region engine maintenance capability for the latest generation of engines, and, many components still leave the region for OEM component shops in Europe, North America or Asia Pacific. This is something that companies such as Mubadala are addressing as they invest in developing the internal capabilities of MRO within the Middle East.”

June 2010

MRO MARKET REPORT

LUFTHANSA TECHNIK NAME: Ziad Al Hazmi JOB TITLE: General Manager at Lufthansa Technik in Dubai What MRO services are currently offered by Lufthansa Technik? Lufthansa Technik is a leading provider of MRO and modification services in the civil aviation industry. We have six business units - maintenance, overhaul, component services, engine services, VIP services and landing gear services - which serve around 700 customers worldwide. In addition, Lufthansa Technik’s network includes more than 30 operating subsidiaries and affiliates, spread across Europe, Asia, Australia and the United States. How strong in the Middle East as a market for MRO services? With increasing fleets in the region, we see increased demand for MRO services and have positioned ourselves to serve customers directly out of the Middle East. Our regional sales office in Dubai covers the entire region and has allowed us to be closer to our customers.

What type of customer base does Lufthansa Technik have in the Middle East region? We serve a large variety of customers, such as low cost carriers, national carriers and VIP clients, in addition to cargo operators. Particularly in the Middle East, with such a large mix of customers, the requirements and needs are vastly different.

NAME: Dr. Ismail Demir JOB TITLE: General Manager at Turkish Technic

How strong in the Middle East as a market for MRO services? The Middle East is one of the world’s key markets for MRO services. According to recent trade reports, the region comes after North America, Western Europe and Asia-Pacific by holding a 5% share of the entire pie. Needless to say, customers in the Middle East have been developing their current fleets, which has resulted in greater demand for MRO services.

June 2010

What are your future predictions for the MRO market? We see that customers in the Middle East are looking for total solutions, such as total component support, total engine support and total technical support, allowing them to concentrate on their core business of flying.

What makes Lufthansa Technik different from others in the market? Our company offers a broad portfolio of services and products. Additionally, we’re an airline-owned MRO provider, which means that the experiences Lufthansa Technik makes with our home airline can be used to improve services and products for other customers. We have managed to gain a large amount of experience in the Middle East. One important factor is that each customer’s needs are different and every situation and environment

TURKISH TECHNIC What MRO services are currently offered by Turkish Technic? We are the leading maintenance centre in our region, providing technical services for airframe, engine, APU and components, with a wide range of airline customers from Europe, the Middle East, CIS, Northern Africa and Turkey. We have a highly qualified and well-trained workforce of 3000 personnel at our base in Istanbul.

requires its own special solution. In Saudi Arabia, for instance, we have a number of customers and partners that require services which are completely different and tailored especially to their operation.

What makes Turkish Technic different from others in the market? Compared to other MROs in the region, Turkish Technic provides a range of services under one roof. In addition, we have 77 years of airline experience, which brings another difference through highlyskilled technicians and employees. The location of Turkish Technic also makes

a difference because we are located in Eastern Europe. Finally, the company’s customer satisfaction programmes have distinguished Turkish Technic from others. This scheme will be adapted to all elements of company, in order to provide an excellent service throughout the world, including the Middle East. What are your future predictions for the MRO market? Turkish Technic aims to capture US$1.5 billion over the next five years as part of our 2010-2015 strategy plan. Our primary market is Eastern Europe, the Middle East, CIS, Central Asia and North Africa, as well as the rest of Europe. Additionally, we aim to expand our services to the entire world, especially component services. Our Middle East customers represent a major share of this revenue objective. Parallel to these goals, Turkish Technic has started to construct state-of-the-art facilities at Sabiha Gokcen Airport in Istanbul, which is designed includes hangars, component backshops, a training centre and other buildings. It will be operational in 2011.

www.arabiansupplychain.com

MRO MARKET REPORT

JORAMCO NAME: Bashir Abdel Hadi JOB TITLE: CEO at Jordan Aircraft Maintenance Company (JorAMCo) What MRO services does JorAMCo offer? As a Jordanian-based maintenance, repair and overhaul facility, I would describe our company as a dynamic aircraft maintenance centre that specialises in aircraft airframe services, component repair and overhaul, covering a range of products from Airbus, Embraer and Boeing. How strong in the Middle East as a market for MRO services? The Middle East is the one region where aircraft fleets are still growing. As a result, MRO facilities are also expanding, which has led to several European MROs establishing or looking to establish alliances with their Mideast counterparts, knowing that many European operators are now looking for maintenance here instead of other parts of the world. For example, SRT’s 100% shareholder is now ADAT

and SIAEC has signed an alliance with Gulf Technic. What type of customer base does Joramco have in the Middle East? JorAMCo’s customer base includes low cost carriers such as Jazeera Airways from the Middle East, charter airlines such as Onur Air, Pegasus and Atlas Jet from Turkey, and NEOS from Italy. We have also attracted the business of legacy carriers, such as Kuwait Airways, Gulf Air, Air India, Royal Jordanian and Alitalia. What makes JorAMCo different from others in the market? JorAMCo’s skilled, experienced and qualified workforce, together with our world-class systems, strong planning and dedicated team has enabled us to cope with changing market requirements from

customers. Other differentiators include a continuous improvement programme and a reasonable cost structure due to location, duty free zone and local workforce. What are your predictions for the future of the MRO market? We are optimistic about the MRO market, especially for the Middle East region, as forecasts have shown there are several deliveries scheduled for new aircraft. However, there will be increased competition from within and outside the region, which will lead to increases in man hour rates to follow the global trends.

interturbine Aviation Logistics

www.interturbine.com

FZE

THE ONE STOP SOURCE

Worldwide Material Support for all Maintenance Materials Appointed for total fleet support by

AIRBUS • ATR • DORNIER EMBRAER • EUROCOPTER • PILATUS

Consolidating > 500,000 Part Numbers from more than 2,500 Sources Guaranteed Supply from Regional Warehouses

Raw Materials

interturbine Aviation Logistics FZE THE ONE STOP SOURCE

Lamps

& Bulbs Consumable Materials (Chemicals)

Semi-finished Materials

Hot Bonder

WORLDWIDE MATERIAL SUPPORT • WWW.INTERTURBINE.COM Interturbine Aviation Logistics FZE c/o Airbus Middle East, Dubai Airport Free Zone · P.O. Box 54982 · West Ring Road, Plot 20 & 22 · Dubai · United Arab Emirates · Supplier Code: SGL04 Phone: +971 4 7030 418 · Fax: +971 4 2995 853 · e-mail: dubai@interturbine.com GERMANY · FRANCE · UK · CZECH REP. · HUNGARY · RUSSIA · USA · CANADA · MEXICO · BRAZIL · P.R. CHINA · JAPAN · SINGAPORE · INDIA · AUSTRALIA · SOUTH AFRICA

www.arabiansupplychain.com

June 2010

MRO MARKET REPORT

AJ WALTER AVIATION NAME: Oliver Smith JOB TITLE: Regional Director at AJ Walter Aviation Middle East What MRO services are currently offered by AJ Walter Aviation? In addition to a full range of component MRO management services, we are able to offer a component repair management service based on the timely replenishment of our own pools, placing over 24,000 individual repair orders worth more than US$100m in value annually. Such repair services are available on either a time-andmaterial, fixed price, or not-to-exceed price basis. We also operate an enviable logistics network with partners such as DHL and FedEx, and maintain a 24/7 AOG service. How strong is the Middle East as a market for MRO services? The emergence and recent boom of lowcost carriers in the Middle East has meant that MRO service providers have had to sharpen up. The reliance of the bigger carriers on large inventories of new parts and individual OEM support is not costeffective. Within the past five years there has been a dramatic improvement in the quality of MRO services, with local

carriers wanting to do more work in-house. The focus of Mubadala in this sector has already proven that it intends to challenge the European legacy MRO providers. What type of customer base does AJ Walter Aviation have in the Middle East? We have a growing Middle East customer base, which is testament to our ability to deliver from a comprehensive range of current Airbus and Boeing inventories. AJW customers vary from single aircraft VIP charter operators and low-cost carriers, through to individual demands from the larger flag carriers. What makes AJ Walter Aviation different from others in the market? AJW is a one-stop shop for all component requirements and on repair management we are able to offer guaranteed turn times backed by our extensive inventories. We have been in the component services business for over 75 years and have a comprehensive inventory of A320/A330/

SIA ENGINEERING COMPANY NAME: Andy Kwek JOB TITLE: Marketing and Sales Manager, SIA Engineering Company What MRO services are currently offered by SIA Engineering Company? SIAEC provides total support solutions through our integrated fleet management programme (FMP), which comprises fleet technical management (FTM) and inventory technical management (ITM), complemented by MRO services such as heavy maintenance, passenger-to-freighter conversions, interior modifications, line maintenance, electronic flight bag, electronic log book and maintenance toolbox. We also have component repair and overhaul through our workshops and 24 joint venture partners with OEMs. For overseas services, SIAEC has grown its external wings with two base facilities in Bahrain and Philippines, and line stations in Hong Kong, Indonesia, Philippines, Australia, Los Angeles and Vietnam. We have capabilities for A380, A340, A330, A320 family, A300-600, B777 and B747. June 2010

How strong in the Middle East as a market for MRO services? The Middle East is a fast growing aviation region, with many big airlines expanding their fleet size at a tremendous rate. This is also matched by the growth of in-house capabilities. Outsourcing work is good for the next five years, however the demand

A340 and B737/B757/B767/B777 parts, with a value in excess of $350 million. Our commercial terms are also amongst the most competitive in the business. What are your MRO market predictions? It will be interesting to see how the big carriers react when their aircraft mature from warranty, since this will affect operating costs. Until now, they have been able to regularly replace their fleets, but this may not be the case now. Also, low-cost carriers are more eagerly seeking financial benefits and this can be delivered by a growing dependence on pooling or exchange options for operational support. Both are more aware of where to achieve savings, so whether they opt for complete coverage solutions or look to individual contracts on engines, components and engineering services is to be determined.

may not be so promising as these airlines build up their in-house capabilities. Smaller airlines have potential FMP work. What customer base does SIA Engineering Company have in the Middle East? Our customers in the region include Gulf Air and Dubai Air Wing. What makes SIA Engineering Company different from others in the market? Our Bahrain maintenance base makes us closer to customers in the Middle East. In fact, our experience in providing services to Gulf Air is a testimony to what SIAEC can achieve for others in the region. What are your predictions for the future of the MRO market? The future is challenging, as more MROs in the region build up their own capabilities. The demand will mainly come from the smaller airlines for FMP services. The bigger airlines will outsource certain fleet types and even then, only as a short-term tie over before they eventually build their own capabilities. www.arabiansupplychain.com

Chromalloy innovation maximizes performance and your proﬁtability. ChromalloySM coatings, repairs and parts extend the life of your gas turbine engine and reduce your operating expenses. We partner with our customers to develop and deliver innovative solutions for your entire engine that combine proprietary repair processes and leading-edge equipment, with the world’s most advanced technology in coatings and manufacturing. This adds value and longevity to your components. And it’s the reason we’re trusted by the world’s leading airlines and armed forces for safety, precision and reliability. It’s innovation that makes an impact—and it’s only from Chromalloy.

Coated RT-200 CBN Abrasive Tip reduces blade tip erosion and improves repair yield.

Repaired CFM56-3 HPT Stage 1 Vane proven with over 14 million hours of operation.

Manufactured CF6-80C2 1ST Stage Blade provides enhanced fatigue life.

chromalloy.com

Chromalloy is a registered service mark of Chromalloy Gas Turbine LLC.

Coatings / Repairs / Parts

SHOW REPORT: DUBAI AIRPORT SHOW 2010

2010

Dubai Airport

SHOW Following its success in previous years, the latest edition of Dubai Airport Show has signalled a new chapter of growth and recovery in the Middle East aviation industry.

he 10th Dubai Airport Show has been hailed a grand success by organiser Reed Exhibitions, with participation from 4700 visitors and 223 exhibitors in total, including the likes of Dubai Airports, Abu Dhabi Airports Company (ADAC), German Airport Technology & Equipment (GATE), British Aviation Group, British Airport Services & Equipment Association, Danish Airport Group, UBIFRANCE (the French Agency for international business development), and Netherlands Airport Technology Group. “We are pleased with the results of this year’s Airport Show, with positive feedback from exhibitors and key industry leaders. The level of interest and engagement by visitors at the event was also outstanding,” states Ara Fernezian, group exhibition director at Reed Exhibitions Middle East. “Both the number of participants and number of participating countries increased this year. We had confirmed participation of over 223 exhibitors from 34 countries, compared to 210 exhibitors from 29 countries in the previous year, which means a 6% increase for exhibitors and 17% growth in the number

June 2010

www.arabiansupplychain.com

SHOW REPORT: DUBAI AIRPORT SHOW

223

of participating countries,” he adds. Under the patronage of His exhibitors took part Highness Sheikh in the 10th Dubai Ahmed Bin Saeed Airport Show Al Maktoum, the exhibition was extended over 10,508m2 at Dubai Airport Expo, with a focus on the airport build, supply, security, technology, ground support, operation and air traffic control sectors. “As part of strengthening the return-on-investments for our exhibitors, we also expanded the Hosted Buyer Programme this year, with 54 hosted buyers compared to 38 in the last show. Through this programme, we provided a highly interactive business platform that brought together key players, developers and managers of airports from around the region, as well as potential suppliers and solutions providers,” continues Fernezian. “Another introduction to the show this year was the project seminars, where project owners, managers and suppliers came together to discuss plans and close deals. This highlighted the show’s relevance as a facilitator for stronger industry linkages.” Reed Exhibitions has confirmed that the next Dubai Airport Show will take place between 5th and 7th June 2011.

DUBAI AIRPORTS “The Airport Show in Dubai is a valuable platform to assess the latest technologies and suppliers that specialise in airport construction, operations, technology and services. It is a great forum for trade professionals to share their expertise and insights on evolving trends and help enhance the operational eﬃciency of future airports,” says Anita Mehra Homayoun, vice president of marketing and corporate communications at Dubai Airports. “As one of the world’s busiest airports, Dubai Airports is involved in major airport expansion projects since the beginning of the decade and has beneﬁtted immensely from the airport technology and expertise the Airport Show features annually.”

www.arabiansupplychain.com

MAHARASHTRA AIRPORT DEVELOPMENT COMPANY “India is making remarkable progress in the aviation domain and has major plans for airport expansion and building a solid infrastructure equipped with the latest innovations. Investment of about US$100-125 million is already in process at airports that are expanding the Maharashtra state in India,” comments S. Sittarasu, marketing manager at Maharashtra Airport Development Company. “We were speciﬁcally looking for airport equipment such as ground security, surveillance, airway navigation and radar systems. This exhibition provided us the opportunity to discover the latest products and services in the industry.”

GERMAN AIRPORT TECHNOLOGY & EQUIPMENT GATE “We continue to select the Airport Show in Dubai because it provides an opportunity like no other. It’s the best destination for business opportunities,” explains Dieter A. Heinz, president of German Airport Technology & Equipment (GATE), which has participated at Dubai Airport Show every year since its launch in 2001. “Germany is known for its airport equipment and infrastructural solutions and was the supplier of choice for ground handling among the hosted buyers.”

OMAN AIRPORTS COMPANY “Participating at the Airport Show presented an excellent opportunity as we have many projects underway in Oman. There were a great number of specialised companies introducing brilliant products and services that helped to leverage the capabilities of our new airports,” says Lee Ebbutt from Oman Airports Company. “Six airports projects are to be implemented over the next few years in Oman. The Muscat and Salalah airport projects alone are estimated at US$5.5 billion. We have managed to progress signiﬁcantly with some exhibitors who will supply us with some of our requirements”.

CHINA NATIONAL AVIATION FUEL CNAF “We were honoured and proud to take part in the Dubai Airport Show for the ﬁrst time this year. Dubai is regarded as one of the most important business centres in the world and this event is highly ranked in China as one of the biggest and most successful shows dedicated to the aviation industry,” states Song Dayu from China National Aviation Fuel (CNAF).

June 2010

SHOW REPORT: DUBAI AIRPORT SHOW

PHOTO SPECIAL:

Dubai Airport Show

how irpor t S Dubai A urn on will ret

5 E-7 2010 TH

JUN

June 2010

www.arabiansupplychain.com

ASK THE EXPERT

PASSENGER PERFECTION Question: How can airports in the Middle

East improve the passenger experience?

Expert: Jihad Boueri, regional vice president of solution line, SITA Middle East and North Africa MOUNTING PRESSURE TO KEEP THINGS SIMPLE FOR AIRLINE PASSENGERS With growing demand for air travel, airport authorities around the world are looking for solutions that will assist in managing and improving the passenger experience. The bulk of their future investments are expected to focus on information technology solutions that can lead to improvements in productivity and efficiency. From these investments, the highest priority will probably centre on passenger processing and services, along with passenger security and aircraft operations. MAJOR INVESTMENTS IN ADVANCED SOLUTIONS WITHIN THE MIDDLE EAST Advanced airports technology has been introduced in a number of Middle Eastern countries to help facilitate each passenger’s journey through the airport. This helps to reduce queues and quickly bypass individuals through the check-in system, passport and border control. In particular, Sharjah International Airport and Abu Dhabi International Airport are well on the way to fulfilling investment in passenger processing, having installed Common Use Self Service (CUSS) technology to decrease the time spent at check-in, with Sharjah airport even announcing the deployment of the world’s first Common Use Self-Service (CUSS) kiosks with an Arabic interface. BUILDING A SOLID CASE STUDY IN THE REGION’S BIGGEST AIRPORT MARKET Another regional example is Saudi Arabia, which has more civil airports than any other country in the Middle East. Since the late 1970s, the Kingdom has achieved unprecedented growth in the fields of civil June 2010

aviation, with giant leaps in quality too. This has generated major developments in Saudi Arabia’s passenger, air cargo and air navigation and control systems. THE SEARCH BEGINS FOR A FLEXIBLE AND PROVEN TECHNOLOGY SOLUTION The General Authority of Civil Aviation (GACA) manages all 26 airports across the Kingdom. In 2006, the authority faced a number of challenges in managing its international airports. This included improving and simplifying the passenger experience, reducing airport queues and tightening flight security. GACA was looking for flexible and proven IT systems that would enable it to integrate and automate operations at the country’s airports in a cost-effective manner — providing benefits for airlines, in addition to passengers. A PROPOSED SOLUTION THAT MEETS INTERNATIONAL REGULATIONS SITA was able to propose a well-balanced solution that satisfied GACA’s technical aspirations, as well as IATA’s regulations and recommendations. Through a fiveyear, US$16.8 million IT solution focused on departure control systems, passenger check-in and baggage management, SITA is helping to drive transformations at each of Saudi Arabia’s international airports. The solution includes SITA’s IT systems, such as AirportConnect Open, Maestro DCS (Departure Control System) Local, and BagManager. HOW DIFFERENT SYSTEMS WERE ABLE TO PRODUCE A COMPLETE SOLUTION SITA’s AirportConnect Open enables airlines operating from each of Saudi international airports to have their own

proprietary applications running on CUTE (common-use terminal equipment). This reduces pressure on airport space and provides airlines with greater flexibility in how they operate within the airport environment — particularly in meeting seasonal traffic demands, such as Hajj, the annual pilgrimage to Mecca. SITA’s MaestroDCS (Departure Control System) Local is a fully automated checkin, boarding control and weight and balance system for aircraft departure control. Designed for airlines, airports, ground handlers and charter companies, it provides check-in and departure control for Saudi airports. Finally, SITA’s BagManager provides the airports with tighter security, improved customer service, and better baggage control by tracking the location of every bag within an airport and across multiple airports. It also ensures that passengers and their baggage travel together, which enables the airports to meet security recommendations from the International Civil Aviation Organisation (ICAO). CELEBRATED SUCCESS Using the new solution, Saudi Arabia’s international airports have streamlined and improved the passenger travel experience, reduced waiting times and improved security. The solution has also benefited the airlines serving Saudi Arabia’s international airports. www.arabiansupplychain.com

AVIATION DATA

AVIATION FACTS & FIGURES A SUMMARY OF LATEST INDUSTRY STATISTICS FROM AROUND THE WORLD

Knowledge of passenger numbers is crucial to improving the aviation business, particularly during the current economic slowdown. Every month we bring you up-to-date industry figures

mproving traffic results seen in December and January continued into February, according to the ACI. Total global traffic grew 6.8%, boosted by a strong increase of 9% in international traffic and domestic growth of 4.8%. International traffic growth was

CITY/COUNTRY

led by large airports including Dubai (23%) and Bangkok (24%). It is to be kept in mind that figures are compared to last year when international traffic was down by 12% and traffic volumes are still down from 2008 levels. Global freight also continues to grow.

FEBRUARY 2010/2009 PASSENGERS (tonnes)

CARGO

% CHG

(tonnes)

YEAR-TO-DATE FEBRUARY 2010/2009 MOVEMENTS

% CHG

(tonnes)

PASSENGERS

% CHG

(tonnes)

CARGO

% CHG

(tonnes)

MOVEMENTS % CHG

(tonnes)

% CHG

MIDDLE EAST ABU DHABI UAE

803,444

17.2

31,767

18.1

8477

13.3

1,705,972

14.0

63,520

21.9

17,594

BAHRAIN BAHRAIN

721,809

8.7

26,540

-7.4

8250

6.7

1,452,591

5.5

52,901

-2.8

17,263

6.1

BEIRUT LEBANON

339,237

22.6

6077

14.2

4512

19.6

708,931

21.6

11,446

9.3

9646

15.4

DUBAI UAE

13.3

3,640,323

22.6

171,708

26.7

22,982

8.9

7,501,848

19.6

343,161

29.1

48,504

8.9

KUWAIT KUWAIT

710,973

12.7

14,875

9.8

7460

6.1

1,379,582

13.4

29,513

7.3

15,608

7.1

MUSCAT OMAN

414,678

35.6

7234

61.4

5070

39.1

854,387

29.3

14,498

61.0

10,452

33.2

SHARJAH UAE

478,020

11.4

39,255

63.1

5250

10.9

1,007,766

8.3

75,543

56.7

10,681

6.0

AFRICA ACCRA GHANA

104,808

13.1

3194

-12.7

2006

38.1

227,478

13.1

6940

-11.2

4129

34.1

1,153,310

15.6

26,887

19.1

11,408

12.5

2,251,406

13.6

54,506

9.2

23,474

11.3

CAPETOWN SOUTH AFRICA

641,447

2.2

n/a

7395

-2.9

1,293,864

1.6

n/a

15,200

-3.1

CASABLANCA MOROCCO

462,977

13.0

3863

-15.9

5501

10.2

977,858

13.4

7908

-13.0

11,572

11.2

DAR ES SALAAM TANZANIA

113,406

11.4

1284

-11.6

4600

4.5

237,685

10.8

2477

-14.1

9566

5.6

JOHANNESBURG S. AFRICA

1,282,214

0.6

22,664

11.2

15,490

0.6

2,671,474

0.6

46,061

20.0

31,559

-1.4

CAIRO EGYPT

MARRAKECH MOROCCO

240,038

12.5

n/a

2333

13.0

471,412

11.3

159

n/a

4952

14.1

SHARM EL SHEIKH EGYPT

659,953

35.5

n/a

4720

26.2

1,334,402

34.8

n/a

9822

24.5

ASIA PACIFIC BANGKOK THAILAND

3,903,116

28.5

97,504

47.9

21,945

15.2

8,120,228

28.5

196,019

46.3

45,766

13.8

BEIJING CHINA

5,301,167

9.0

95,959

6.4

38,565

5.4

10,741,899

8.2

217,606

19.8

79,519

5.4

MANILA PHILIPPINES

2,011,596

17.0

31,534

56.8

18,608

9.9

4,163,860

12.7

63,952

61.1

38,810

8.0

MUMBAI INDIA

2,103,504

11.7

50,086

25.2

19,219

3.2

4,461,866

13.0

102,150

27.9

39,906

2.4

NEW DELHI INDIA

2,213,670

10.0

43,918

34.8

20,092

7.4

4,464,517

14.1

85,288

32.5

40,489

6.4

SINGAPORE SINGAPORE

3,108 244

21.5

132,388

15.6

19,983

11.0

6,492,717

15.3

275,726

18.0

41,828

8.1

SYDNEY AUSTRALIA

2,804,222

12.2

n/a

23,334

4.6

5,851,735

8.8

n/a

47,642

3.8

TOKYO JAPAN

4,828,656

3.9

57,725

3.3

12,805

0.2

9,612,029

1.5

115,086

3.2

26,999

0.0

FRANKFURT GERMANY

3,307,837

-1.0

166,625

28.2

33,348

-3.0

6,980,154

1.3

328,261

29.1

68,626

-1.7

LONDON HEATHROW UK

4,614,650

5.2

118,372

22.4

35,569

2.0

9,461,370

2.1

230,811

17.8

72,209

-1.5

MADRID SPAIN

3,414,026

3.5

29,807

22.7

32,694

-0.9

6,851,326

6.5

58,535

20.6

66,511

0.5

MUNICH GERMANY

2,167,759

-2.0

18,473

10.5

27,525

-8.0

4,316,139

-1.5

36,508

14.0

54,946

-6.8

PARIS FRANCE

3,821,563

0.1

149,000

6.0

36, 260

-7.3

7,975,812

0.6

296,100

8.5

75,600

-6.5

EUROPE

NORTH AMERICA ATLANTA

5,966,391

-3.3

48,502

16.9

68,858

-4.4

12,414,584

-4.0

95,163

14.5

145,960

-2.8

CHICAGO

4,405,448

2.8

96,587

30.1

62,520

0.4

9,061,143

2.7

193,069

27.2

130,055

0.6

DALLAS FORT WORTH

3,843,390

-3.2

54,131

12.3

47,557

-1.3

8,122,059

-0.2

103,369

13.1

101,526

1.2

LOS ANGELES

3,960,497

4.5

128,794

25.4

42,810

3.7

8,570,217

6.3

257,041

25.2

89, 780

3.5

Passengers = total passengers enplaned and deplaned (transit passengers counted once). Cargo = loaded and unloaded freight & mail. Source = Airports Council International *Growth rate > 200% or < -50% due to extraordinary circumstances, i.e. war, social and political unrest, major sports events, new routes.

June 2010

www.arabiansupplychain.com

AVIATION DATA

EMIRATES SKYCARGO FUEL PRICE INDEX

AIRLINE ON-TIME STATISTICS & DELAY CAUSES: MARCH 2010

450

30April

9 April

430

Air carrier delay 5.24%

Ontime 79.96%

Weather delay 0.54%

Diverted 0.24%

427

14 May

406

410

23 April

418

26 March

396

21 May

370

373

330

Index

100 = 53.5 US cents per US gallon

FUEL PRICE INDEX

THE FUEL INDEX IS BASED ON THE AVERAGE PRICE OF AVIATION FUEL IN FIVE KEY SPOT MARKETS (ROTTERDAM, SINGAPORE, NEW YORK, US GULF AND US WEST COAST)

290

National aviation system delay 6.03%

Cancelled 1.50%

19 Mar 10

26 Mar 10

4 Apr 10

9 Apr 10

16 Apr 10

23 Apr 10

30 Apr 10

7 May 10

14 May 10

21 May 10

250

SOURCE: Bureau of Transportation Statistics (www.transtats.bts.gov)

Planned capacity growth for top 10 carriers between Middle East and Western Europe (OAG Data June 2010 versus June 2009)* AIRLINE

WEEKLY CAPACITY

WEEKLY FREQUENCY

ASK Million Change (%)

Total

Planned capacity growth for top 10 carriers between Middle East and Asia/Pacific (OAG Data June 2010 versus June 2009)*

WEEKLY SEATS

Change (%)

Total

Change (%)

AIRLINE

EMIRATES

850

520

172,934

ETIHAD AIRWAYS

219

200

43,368

GULF AIR

-21

-6

16,124

-20

IRAN AIR

-2

15,628

-3

-25

-33

1320

-33

128

23,766

334

322

72,348

ROYAL JORDANIAN SAUDI ARABIAN AIRLINES

JAZEERA AIRWAYS MIDDLE EAST AIRLINES QATAR AIRWAYS ROYAL JORDANIAN

152

20,846

MAHAN AIR

5140

SAUDI ARABIAN AIRLINES

17,068

AIR ARABIA MAROC

WEEKLY CAPACITY

WEEKLY FREQUENCY

ASK Million Change (%) 25

Total

WEEKLY SEATS

Change (%)

Total

Change (%)

1338

954

292,248

390

336

73,368

AIR ARABIA

126

296

47,952

GULF AIR

167

-28

212

-7

43,072

-25

-63

-67

990

-67

594

534

121,985

6850

292

213

71,851

MAHAN AIR

100

8820

OMAN AIR

220

36,556

JAZEERA AIRWAYS QATAR AIRWAYS

WEEKLY CAPACITY

Change (%)

12,600

AIR FRANCE

277

42,204

AIR ALGERIE

318

49,227

BRITISH AIRWAYS

14,232

LUFTHANSA GERMAN AIRLINES

112

18,630

EGYPTAIR

WEEKLY FREQUENCY

ETIHAD AIRWAYS

WEEKLY SEATS

Change (%) 84

EMIRATES

WEEKLY CAPACITY ASK Million Change (%)

Planned capacity growth for top 10 carriers between North Africa and Middle East (OAG Data June 2010 versus June 2009)*

Planned capacity growth for top 10 carriers between North Africa and Western Europe (OAG Data June 2010 versus June 2009)* AIRLINE

Aircraft arriving late 6.44%

Security delay 0.06%

115

258

43,154

TURKISH AIRLINES

118

21,368

TUNISAIR

400

66,471

AIGLE AZUR

237

40,778

AIRLINE

WEEKLY FREQUENCY

ASK Million Change (%)

Total

WEEKLY SEATS

Change (%)

Total

Change (%)

EMIRATES

21,250

ETIHAD AIRWAYS

7540

AIR ARABIA

11,340

GULF AIR

-18

6954

-14

JAZEERA AIRWAYS

-22

-24

8250

-24

MIDDLE EAST AIRLINES

4184

QATAR AIRWAYS

19,902

ROYAL JORDANIAN

100

11,610

SAUDI ARABIAN AIRLINES

144

36,214

2968

OMAN AIR

*Data is for week of 8-14 June, 2010 against 7-13 June, 2009. Regions follow IATA definition. E-mail: dataservices@oag.com www.arabiansupplychain.com

June 2010

AVIATION DATA

AVIATION FACTS & FIGURES A SUMMARY OF 2009 STATISTICS FROM SHARJAH INTERNATIONAL AIRPORT

AIRCRAFT MOVEMENT AIRCRAFT MOVEMENT

FREIGHT HANDLED

AIRCRAFT MOVEMENT

MONTH 2009

SCHEDULED

NONSCHEDULED

TOTAL

MONTH 2009

OUT

TRANSFER

TRANSIT

TOTAL

January

4154

807

4961

January

5873

10,686

7584

11,640

35,783

February

3703

749

4452

February

6233

10,401

7430

11,296

35,360

March

4071

880

4951

March

10,856

14,796

9376

13,335

48,363

April

3947

850

4797

April

6265

14,952

8666

13,109

42,992

May

4057

989

5046

May

11,406

15,012

9230

9213

44,861

12,833

18,855

10,223

5531

47,442

June

3980

1090

5070

June

July

4291

1114

5405

July

12,445

17,991

10,030

1649

42,115

August

4421

1000

5421

August

12,315

15,562

9858

1823

39,558

September

4295

821

5116

September

11,567

15,743

8400

1561

37,271

October

4388

920

5308

October

12,169

17,115

8260

467

38,011

Grand Total

41,307

9220

50,527

Grand Total

101,962

151,113

89,057

69,624

411,756

PASSENGER MOVEMENT

MONTH 2009

OUT

TRANSFER

TRANSIT

TOTAL

January

220,643

209,557

38,561

32,650

501,411

February

181,965

182,979

34,054

30,291

429,289

March

183,385

202,688

36,611

34,190

456,874

April

200,230

213,346

41,057

17,552

472,185

May

202,359

220,840

47,576

669

471,444

June

185,964

237,156

43,264

495

466,879

July

221,743

249,667

48,867

451

520,728

August

249,608

192,277

40,525

216

482,626

September

208,406

189,363

41,573

302

439,644

October

225,401

208,781

54,663

608

489,453

Grand Total

2,079,704

2,106,654

426,751

117,424

4,730,533

SEA-AIR CARGO 6000

5000

4000

3000

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT Around 4.24 million passengers travel through Sharjah airport in the first three quarters of 2009 – an increase of 8% from 2008

June 2010

www.arabiansupplychain.com

RECRUITMENT

TO ADVERTISE HERE CONTACT: Nick Lowe Tel: +971 4 210 8306 Email: nick.lowe@itp.com

MOVERS & SHAKERS Gulf G Air expands its management team w deputy chief executive oﬃcer with M Maher Salman Al Musallam has been aappointed as deputy chief executive officer at G Gulf Air. The Bahraini national will directly rreport to the airline’s CEO Samer Majali and b brings a wealth of experience, with a career spanning 35 years iin the Royal Bahraini Air Force. “Gulf Air is continuing the rapid implementation of its new strategy and we certainly welcome someone of Maher Salman Al Musallam’s calibre to the team,” commented Majali.

O Oman Air announces the appointment o of chief management aﬀairs oﬃcer O Oman Air has promoted Abdul Aziz Al Raisi tto the position of chief management affairs oofficer. The aviation executive has been w working with Oman Air for over 26 years aand started his career as an engineering trainee In his curren trainee. current position, Al Raisi will be involved in all technical projects that iinvolve new aircraft being acquired by Oman Air. “Abdul Aziz has proven his mettle as an effective and dedicated manager at Oman Air. He has risen up the ladder through his sustained performance, including the great work he has undertaken in our acquisition of Airbus wide-bodied aircraft,” stated Peter Hill, CEO of Oman Air.

E Etihad recruits head of business sstrategy development K Khawla Salem Al Badi has been recruited aas head of business strategy development ffor Etihad Airways’ IT department. A UAE n national, Al Badi will be responsible for aaligning the airline’s IT programme with its business strategy in areas such as pricing, crew planning, flight operations and business intelligence. “Khawla brings a vast amount of experience and expertise to the role, which will benefit both the information technology area and our airline as a whole,” said James Hogan, chief executive officer of Etihad Airways. “We currently have Emiratis in senior roles across our network and will increase our efforts to recruit skilled UAE nationals in the future.”

S Senior vice president appointed a at Etihad Crystal Cargo R Kinnear has been revealed as the new Roy ssenior vice president of Etihad Crystal C Cargo, replacing executive vice president D Des Vertannes, who has accepted a role aas global head of cargo at IATA. Kinnear will be responsible ffor the strategic development and growth of Etihad’s cargo division, which offers a range of services linked to the airline’s route network and fleet. “Etihad Crystal Cargo has grown considerably since it was launched in 2004 and Roy’s wealth of experience in the airline industry will be crucial to the further development of this specialised division,” said James Hogan, CEO of Etihad Airways.

Amadeus Gulf hires managing director A A Amadeus has appointed Geert Boven as m managing director of Amadeus Gulf. In his n new position, Boven will provide strategic d direction and oversee the growth and eexpansion of Amadeus operations in the U UAE, Oman and Bahrain. “Greet Boven brings an extensive knowledge k of the regional and global travel industry,” commented Antoine Medawar, vice president of Amadeus MENA. “Under his leadership, we are confident of further expanding our presence in the Middle East as we continue to deliver consistent service and value to our partners.”

Al Mosa to manage Etihad investments A E Etihad Airways has announced the aappointment of Bassam Abdullatif Al Mosa aas the airline’s vice president of corporate in investments and subsidiaries. Al Mosa, a U UAE national and graduate of Portland State U University, will be responsible for managing investment projects for Etihad Airways, with duties such as maintaining financial control and managing Etihad subsidiaries from a board perspective. “I’m delighted to congratulate Bassam Abdullatif Al Mosa on his new role. He has played a key role in our corporate finance team over the past three years and brings a wealth of local and international expertise to his new position,” stated James Hogan, CEO of Etihad Airways.

Please email your ‘movers and shakers’ information to robeel.haq@itp.com P June 2010

www.arabiansupplychain.com

DEPARTURE LOUNGE

BAHRAIN BRILLIANCE

Schaher Murad, regional manager of Lufthansa in Bahrain and Eastern Province Saudi Arabia, celebrates the international airline’s 25th year of operations in Bahrain.

How did Lufthansa start its operations in Bahrain two-and-a-half decades ago? Bahrain was one of the first active airports in the Gulf region and managed to attract the attention of many airlines, including Lufthansa. It was used as a stopover station for many of Lufthansa’s Far Eastern flights. The Airbus A300 was the main aircraft deployed, and the most flown routing was Frankfurt-BahrainKarachi- Bahrain- Frankfurt. How large is the airline’s Bahrain team? We have ten employees in Bahrain that take care of the passenger sales and services, airport handling and cargo operations. In addition, a dedicated team in our Riyadh regional office supports the Bahrain office with marketing, finance and administration. What has been the biggest highlight for Lufthansa in Bahrain? A major highlight was the successful increase of frequencies from four weekly flights to daily service, offering daily connections from the Kingdom to over 200 destinations around the world, via our Frankfurt hub. The successful increase of our code sharing flights in Europe and over the Atlantic further helped to enhance our product in terms of offering more flight options to Bahrain travellers. What has been the biggest challenge? Sustaining profitable growth at times of uncertain market demand is a challenge that Lufthansa has accepted and so far we have been successful in facing this challenge. We are committed to Bahrain and this is why we increased our frequencies even at these uncertain times. June 2009

How strong is the Bahrain market in general for airlines and how strong is Lufthansa’s share in the country? I think one needs to consider the potential in Bahrain itself, as well as the potential out of Saudi Arabia’s Eastern Province, which are especially interesting for westbound carriers. The scope for further growth is very interesting. Lufthansa has already managed to grow, both in terms of absolute number of passengers carried to and from Bahrain and its market share. The main contributors were our extensive network, together with our Star Alliance membership and the highly-rewarding Miles and More frequent flyer programme. We also had the support of our main sales partners, the travel trade in the Bahraini market. In fact, we introduced “eXperts”, a new online communication platform dedicated to travel agency staff in April, which will enable us to further service this vital sales channel. Which airlines are the biggest rain? competition for Lufthansa in Bahrain? Lufthansa likes competition since ince we believe that it helps increasing efficiency and service innovation. What makes the Bahraini aviation market diﬀerent to others countries around the world for Lufthansa? I would say the business sense and d support of the Civil Aviation Authorities is unique ufthansa. and very much appreciated by Lufthansa. auseway The location of Bahrain and the Causeway eated link to Saudi Arabia has also created a, a multi-country catchments area, n which helps to distinguish Bahrain er from the bulk of Lufthansa’s other markets around the world.

What are the popular routes for your customers to and from Bahrain? The financial services and oil and gas industry sectors are among the top contributors to westbound travel demand out of Bahrain. We are observing a significant amount of demand for travel to the United Kingdom, Italy, France and to the US and Canada. To the US, travel between Texas and Bahrain is very popular, thanks to the oil industry. Given the recent start of the so-called Atlantic cooperation between Lufthansa, United Airlines, Continental Airlines and Air Canada, we are now able to offer double daily services between Frankfurt and Houston, which will support this demand. How are you expecting Lufthansa’s operations to develop in Bahrain over the coming years? Lufthansa is very positive about our Bahrain operations and expects an increase in travel demand. We want to continue growing our business by constantly enhancing our services. One in cornerstone our strategy is on focusing quality service by offering a variety of tailor made products to individuals, travel trade and corporate clients.

www.arabiansupplychain.com

The future and us: a perfect match.

Great challenges are part of our everyday routine. With over 50 yearsâ&#x20AC;&#x2122; experience in maintenance and repair, not to mention acting as launching customer for a great number of new planes, you can rest assured that we are already making all the necessary arrangements and will be ready to go the moment your plane is. Just like all other types of aircraft, your 787 will beneďŹ t from our comprehensive Start-up-Support, including maintenance and component support. We look forward to working together to ensure a perfect launch. Lufthansa Technik AG, Marketing & Sales E-mail: marketing.sales@lht.dlh.de www.lufthansa-technik.com Call us: +49-40-5070-5553

More mobility for the world.