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Like air carriers in the Gulf region, Turkish Airlines is hiring sport stars and other celebrities for their marketing and sponsorship campaigns. The airline also seeks, like the big three, to boost the size of its fleet and its passenger capacity. But, Emirates, which is the world’s most valuable airline brand—worth $6.6 billion according to the 2015 Brand Finance Global 500 report—wants to be the largest air carrier on the planet by 2020 and plans to have 250 aircraft serving 70 million passengers across six continents, said Thierry Antinori, Emirates executive vice president and chief commercial officer.
“However, being the biggest airline in the world is not really our final goal. Our aim has always been to connect travellers from around the world to Dubai and other destinations with just a single stop via our hub,” Antinori told Fanack Chronicle via email. He added that the company, with its partners in Dubai, is already making progress in its plans to ensure that the proper infrastructure is in place to support and capitalize on the growth the airline expects in coming years.
Asked whether Emirates is concerned that other airlines, particularly Turkish Airlines, may consider moving into the main market of the Dubai-based carrier, the senior executive said Emirates is focused only on its own growth. “We currently have 234 wide-body aircraft in our fleet and are the largest wide-body operator in the world. We are not concerned about the activities of other airlines and are focused on our own organic growth. It is important to have competition in this industry. It keeps us all agile, and this, in turn, ensures the customer experiences the best service and experience possible. We respect the competition, but we do not spend too much time worrying about it. We focus on getting our own product right.” In 2014, Emirates Airline posted a 40 percent increase in full-year profit, to $1.3 billion.
Flying to more countries than any other airline in the world, according to its management, Turkish Airlines today reaches 264 destinations in 108 countries. Turkish Airlines now operates 263 aircraft—55 wide-body, 199 narrow body, and nine cargo aircraft—according to the company’s financial statement.
In 2015, Turkish Airlines is aiming to increase its capacity by 15 percent. The total number of passengers carried is targeted to reach to 63.2 million, including 26 million on scheduled domestic routes, 36 million on scheduled international routes, and the balance on charter and hajj flights. By the end of 2015, the fleet is planned to reach to 293, including 214 narrow-body, 68 wide-body, and 11 cargo aircraft. Turkish Airlines plans to add two new domestic and seven new international destinations to its network in 2015, bringing the total number of destinations to 273. Turkish Airlines has tripled its global market-share in the last ten years and has been awarded the “Best Airline in Europe” designation for the last four years.
Abu Dhabi–based Etihad Airways also has ambitious expansion plans to make itself a major global player in the aviation market. The national airline of the United Arab Emirates achieved its strongest financial results to date in 2014, posting a net profit of $73 million on total revenues of $7.6 billion, up 52.1 per cent and 26.7 percent respectively from the previous year. Etihad Airways, which carried a total of 14.8 million passengers in 2014, wants to continue to invest in the new routes, aircraft, products, and infrastructure needed to compete effectively. According to its management, Etihad Airways has the largest route network of any Middle Eastern carrier, reaching more than 500 destinations. It will continue to boost its sales and marketing opportunities in key markets.
Doha-based Qatar Airways currently has more than 340 aircraft on order, worth more than $70 billion, including Boeing 777s and 787s and Airbus A380s and A350s. Qatar Airways is one of the fastest growing airlines and operates one of the youngest fleets in the world. In 2014, the company flew to 146 destinations and plans to add several routes in Europe, Africa and Asia.
Will Horton, a senior analyst at the Centre of Aviation (CAPA), told Fanack that Turkish Airlines is similar in some ways but also different to the Gulf network carriers. Turkish has a domestic market and large point-to-point traffic to and from Europe. International connecting traffic for Gulf carriers can be around 80 percent but is 28 percent for Turkish.
Turkish has the geographical advantage of being closer to Europe, allowing it to serve easily any destination with narrowbody aircraft, which is one reason Turkish serves so many more destinations in Europe than Gulf carriers.“Being closer to Europe also means being farther from Asia. For example, Australia cannot sustainably be served nonstop from Istanbul but can be from Gulf hubs,” Horton said. Turkish is interested in more long-haul flights, but Turkey’s traffic rights are not as strong as those of the Gulf carriers. Turkish needs more wide-body aircraft. It has a small backlog of wide-body aircraft and plans to use many of them for replacement rather than growth, Horton added.
The governments of Turkey, Abu Dhabi, Dubai, and Qatar are, however, spending hundreds of millions every year on airlines and aviation to remain atop the global market. Dubai and Abu Dhabi are expanding their state-of-the-art airport, and Qatar opened a vast new airport in 2014 that seeks to transform the gas-rich country into a major aviation hub, as it prepares to host the 2022 World Cup. The Hamad International Airport can now accommodate 30 million passengers annually, with plans for expansion over the next several years.
According to Reuters and other international news agencies quoting former Turkish transport minister Binali Yildirim, however, Turkey aims, by the end of 2018 or early 2019, to open in Istanbul the world’s largest airport, which is expected to reach its full capacity by the end of 2024. The Gulf’s big three airlines have long been accused by their rivals in Europe and America of receiving government subsidies, but the aviation giants have always rejected the claims.
EU and US carriers claim that Emirates, Etihad, and Qatar Airways benefit from low oil prices. When Emirates, Etihad, and Qatar moved into the US market, more than a decade ago, under the open-skies agreements they signed with the US government, American carriers, such as Delta and United Airlines, feared that competition would be unfair on account of subsidies offered to the Gulf airliners.
“With oil all around us in the Middle East, our critics have found the perfect lie in accusing us of receiving cheap fuel. But the facts have always been hiding in plain sight: Dubai has extremely limited oil reserves, and only one small-scale jet fuel refinery. Because of this, our primary kerosene [jet fuel] suppliers are Western energy firms, which charge commercial prices,” the Emirates said in a report posted on its website that aimed to dispel accusations surrounding Emirates and airline subsidies.
Tim Clark, the president of Emirates Airline, said in the report that Emirates sees much to be encouraged about: more and more countries recognize that liberal air access has a multiplier effect on their economies and best serves their national interest. Yet, he said there are still cases in which some flag carriers or their alliance proxies successfully block new competition by creating an echo-chamber of repeated false assertions about rivals. “We recognize that our success has made us a target and some airlines have been willing to make gross misrepresentations about Emirates and Dubai in order to serve their interests. We have nothing to hide and welcome all discussion on our activities,” he added.