Asian airlines need to grow quickly to compete with Gulf airlines
Monday, August 25, 2008: With the Gulf carriers growing at a phenomenal rate and the growing presence of hubs in the Middle East, Asian carriers are going to have to launch grand expansion plans for their hubs to compete.
In a recent opinion piece for The Australian, Derek Sadubin Centre for Asia Pacific Aviation (CAPA) COO, had written that Asian carriers, and subsequently their hubs were seeing increasing competition from their Gulf counterparts.
“[Asian airlines] and their hub airports are in a long-term fight with the Middle East hubs and their emerging mega-carriers,” said Mr Sadubin.
Pointing out to Cathay, and home base Hong Kong, along with Singapore, and home base Changi, strong capacity growth by the two has seen good numbers for their home hubs.
He adds that the two airlines’ yields must be suffering though.
Pointing out that on Airbus and Boeing’s order books, Middle East carriers take up 13% of overall future orders. But looking more closely, in terms of long-haul orders the Middle East has earmarked a quarter of all future orders.
“Much is at stake here,” he writes. “Cathay, SIA and their respective hubs can come out of the turbulent conditions stronger, capturing traffic from rival Asian hubs,
whose flag carriers are shrinking by necessity in the present environment.”
“But the price of that potential gain is likely to be a sacrifice of profitability.”