The fast-growing Middle Eastern airlines continue to flex their fleet muscle, positioning themselves for a bigger slice of the global aviation market

Courtesy of Airbus

Having carved for themselves a hub operation in the Middle East, the trio of Gulf carriers – Emirates, Qatar Airways and Etihad Airways – has since turned the tables on the once-fabled Kangaroo Route, leaving in their wake Asia-Pacific airlines which were the dominant carriers on the Australia-Europe routes. And when they are done with offering travellers from Australia and Asia a one-stop service to just almost anywhere in Europe, these airlines began to offer similar one-stop services to destinations in Africa and North and South America.

Only the Pacific Ocean routes seem to have eluded the Middle Eastern carriers but with partnerships and mergers flying in every direction, this might just be realised, as in the recently forged Emirates-Qantas alliance. Meanwhile, other Middle Eastern carriers such as the once-multinational Gulf Air (now exclusively owned by Bahrain), Royal Jordanian Airlines and Oman Air have found it difficult to challenge the dominant trio.

In the last few years, however, a new challenger in the form of Turkish Airlines has emerged. Away from the limelight shone on the three Gulf carriers, Turkish Airlines quietly grew its footprint from 10.4 million passengers in 2002 to 38.5 million passengers in 2012. Revenue grew even faster from US$2 billion in 2002 to US$8.1 billion in 2012.

Leveraging on its Istanbul base as a bridge between Europe and Asia, Turkish Airlines’ strength, according to CEO Temel Kotil, lies in its ability to service Europe and much of Africa with narrowbodies, enabling greater frequencies and capacity-matching to achieve high load factors that triumph its Gulf rivals with their widebody jets. The airline will add Sydney to its network by 2014.

Apart from heavy investment in airport infrastructure by the governments in the UAE and Qatar, the Turkish government has outlined plans to build one of the world’s largest airports in Istanbul with an annual throughput of 150 million passengers. Construction is expected to take only four years and costs around US$8.7 billion.

In its financial year of 2012-2013, Emirates grew its fleet by 34 widebody aircraft and its profit by a spectacular 52 per cent, even as most international airlines are struggling with shrinking profits, load factors and yield.

By any measure, Emirates, Qatar Airways, Etihad Airways and Turkish Airlines have been spectacularly successful and have also proven to be highly competitive as they continue to sniff out interesting city-pairs that could be hubbed through their homebases. All four carriers have also undertaken extensive investments in marketing campaigns and sporting events sponsorship.

The three dominant Middle Eastern carriers have invested heavily in fleet expansion since their inception. In various instances, Emirates and Qatar Airways have been instrumental in pushing the manufacturers to boost the aircraft’s performance and capabilities, resulting in workhorses that perfectly suited their needs. But neither was it a zero-sum game as other airlines also benefitted immensely. Today, many of the world’s most heavily travelled air routes are served by twin-engine aircraft and the Boeing 747 – dubbed Queen of the Skies – which is beginning to retire in greater numbers.

In the past decade, Airbus and Boeing have centred much of their attention on the Middle Eastern carriers as Emirates, Qatar Airways and Etihad have inked record-smashing deals for top-of-the-line airliners year after year. And it is certain that the major Gulf carriers will continue to hog the limelight when orders are announced at major air shows, including the Paris Air Show next month.

B777-300ER: Boeing’s wonder machine
The Boeing 777-300ER – Boeing’s answer to the Airbus A340-600 – appears to be a front runner in the fleet of the Middle Eastern airlines, but not necessarily bearing the honour of being the carriers’ flagship aircraft. One of the most economical and versatile twin-engine aircraft to operate profitably on both longhaul and medium-haul routes, the B777-300ERs are used by the Middle Eastern carriers on nonstop services to destinations as far-flung as Australia, New Zealand and Brazil, and also on relatively shorter routes to the Indian subcontinent.

Equally versatile is the aircraft’s seating configuration. Emirates’ B777-300ERs have four variants ranging between the high-density, 442-seat configuration and the low-density, 360-seat configuration, and the airline has opted for the high-density configuration by putting 10 seats in each row in the economy class, while many carriers opt for just nine seats in each row. The B777-300ER comes in two variants for Etihad (330 and 440 seats) and Qatar Airways (335 and 380 seats), while Turkish Airlines has also ordered a fleet of B777-300ERs configured with 340 seats in three classes.

Even as the B777-300ER continues to gain big orders worldwide, Boeing is reported to be offering the B777X in two variants with improved performance. Qatar Airways is expected to order up to 50 of this variant, and Emirates too has confirmed that it is looking at “a healthy number” of these, noting that by the time the B777X is available, it will have 175 B777ERs to replace. The number ordered will depend on the replacement cycle, the Airbus A350-1000s as well as the availability of more Airbus A380s. The B777-9X, one of the two B777Xs that Boeing is reportedly offering, is nicely slotted between the A350-1000 and the A380 in capacity.

A380: a new queen in the making
Airbus envisaged the A380 as the high-capacity workhorse suited to operate between the world’s major hubs, particularly in highly slot-constrained airports such as London-Heathrow and Tokyo-Narita. Singapore Airlines was the first to operate the A380 in October 2007, and with glowing media reports and passenger reviews highlighting the A380s’ stability and ultra-quiet cabins soon after, the A380 quickly became a household name among the travelling public.

Early A380 operators reported higher demand for the superjumbo flights over other aircraft types on the same routes. Many travellers also began to differentiate airlines as those who “have” or “have not” gotten A380s in their fleet.

For those who are already operating the A380 or awaiting delivery of theirs, the superjumbo is the company’s flagship aircraft. Emirates deploys its A380s mostly on longhaul destinations such as Sydney, Singapore, Bangkok, Hong Kong, Kuala Lumpur, London, Los Angeles and Johannesburg and also on shorter services to key European destinations and Saudi Arabia. Emirates, however, has been prevented from operating the A380 into markets such as India and most recently Austria. The cavernous two-deck interior has given airlines tremendous flexibility in customising their premium class cabins. Emirates remains the only airline in the world to install showers and shisha rooms on board its A380s – exclusively for its first class passengers.

Both Qatar Airways and Etihad have 10 A380s on order but have not divulged their configuration plans and cabin facilities. Airbus has just begun production of Qatar Airways’ first A380. Turkish Airlines has also expressed interest in acquiring large-capacity aircraft in the same class as the A380 and Boeing 747-8 Intercontinental but no decision has been announced yet.

Boeing 787 Dreamliner: a nightmarish start
Designed as a replacement for the Boeing 767s and Airbus A310s, the Boeing 787 Dreamliner is a medium-capacity aircraft with the ability to operate on longhaul routes. Boeing had strongly marketed the B787 as an aircraft that could bypass major hubs – Japan Airlines (JAL) has utilised this aircraft in this respect to open up new routes such as Tokyo to Boston and San Jose.

The Dreamliner – already seriously delayed by the time of its first delivery to All Nippon Airways (ANA) – failed to live up to its promise and turned out to be a nightmare for the first batch of recipient airlines (Qatar Airways, ANA, JAL, United Airlines, LAN Airlines and LOT Polish Airlines). Two separate fires in the ion-lithium battery compartment resulted in the worldwide grounding of all B787s in January 2013.

The four-month grounding was lifted after a fix was finally approved in May 2013 and airlines were quick to return their Dreamliners into the sky. Qatar Airways resumed services of the B787-8s on May 20 to serve Dubai, London-Heathrow, Munich and Frankfurt. The B787 is expected to be deployed on its trans-Atlantic routes in 2014.
As more airlines take delivery of their B787s in the next couple of years and barring any further groundings, passengers may forget the initial hiccups and instead focus on the aircraft’s large electro-chromic windows, higher cabin humidity and pressure – factors that mitigate the effects of jetlag – and roomier and quieter cabin. Besides the strong passenger appeal, airlines will also benefit from the B787s’ highly fuel-efficient engines and maintenance savings resulting from the aircraft’s composite structure.
Boeing offers two variants of the Dreamliner: the B787-8 and the higher-capacity B787-9. Although only two of the four carriers reviewed have ordered this aircraft, it is expected that further orders will materialise, especially if Boeing rolls out a higher-capacity and longer-range model that various Middle Eastern carriers have sought.

A350: Airbus’ next venture
A strong competitor to both the B777-300ER and B787 Dreamliner, the Airbus A350 is highly suited for medium- and thin longhaul routes where demand is insufficient to support the use of the B747-8 Intercontinentals and A380s.

At press time, the first A350 painted with the Airbus’ corporate livery has just been unveiled in Toulouse, and will be put through exhaustive tests before starting its maiden flight this summer. A total of three variants have been planned: the A350-900 will be the first to be introduced, followed by the shorter A350-800. The longest, A350-1000, together with the -900 variant, find greater favour among the Gulf carriers. While Turkish Airlines has committed to a renewal of its narrowbody fleet, it has yet to announce its choice of future widebody aircraft and the race is on for Airbus to push for its A350s to be chosen.

Interestingly, Qatar Airways and Etihad have opted to order both the B787 and A350, carefully choosing the variants in both types to minimise capacity and performance overlaps. Given that recent new aircraft types such as the A380 and B787 have faced lengthy delays and performance hiccups, it is perhaps an insurance on the carriers’ part against the non-performance of either the B787 or A350. The A350s will be deployed mainly on longhaul routes to Asia-Pacific, capital and secondary cities in Europe, Africa and other cities in the Middle East where demand is high.

A340: the workhorse of yesteryear
When the competition heated up between the four-engine A340 and the twin-engine B777, Airbus and carriers such as Virgin Atlantic Airways were quick to claim that four engines were more reliable than two. Virgin Atlantic even painted the slogan “4 Engines for Longhaul” on its A340 fleet.

The A340 was produced in four variants – the A340-200, the slightly bigger A340-300, the even larger A340-500 and the longest-range A340-600. None of the Middle Eastern carriers ordered the -200 variant and only Emirates and Turkish Airlines operated the -300 variant. The A340-500 is considered a niche aircraft due to its ultra-long range capability and, as such, were often deployed on services to faraway destinations in North and South America and Australia. Where demand is high on these routes, the A340-600s’ high capacity was put to good use.

While the A340s were considered very quiet and well-suited for longhaul routes by virtue of having four engines, the General Electric GE90 engines that power the B777-300ERs were gaining a reputation for reliability and fuel economy – the latter especially attractive to airline bean counters amid skyrocketing fuel prices. Engine maintenance is a significant cost component and with four engines to maintain, the A340s quickly found the numbers stacked against it. As the A340-600s competed directly against the B777-300ERs, it was no surprise that both Emirates and Qatar Airways utilised every available avenue to cancel all and part of their orders respectively.

All these notwithstanding, the various variants of the A340s were extremely popular with passengers though, most notably for the low cabin ambient noise. Emirates’ small fleet of A340-300s are mostly deployed to European destinations such as St Petersburg, Munich, Milan, Dusseldorf and Glasgow, while Turkish Airlines continues to operate its A340-300s to Asia-Pacific, Europe and North America.

Qatar Airways’ A340-600s are operated to European cities such as Frankfurt, Paris, London and Zurich as well as to farther destinations such as Hong Kong. Etihad’s A340-600s too service many European cities but are also despatched to longhaul destinations such as New York, Sydney and Melbourne.
Ultimately, economics triumphed all else and the A340s were maintained on the current fleet of the Gulf carriers in limited numbers. Production of the A340 was halted as orders evaporated.

This article was first published in TTG Asia, May 31 – June 6, 2013 issue, on page 10. To read more, please view our digital edition or click here to subscribe.