Gulf hubs face leapfrog challenge of ‘last frontier’ non-stop flights

Australia’s Qantas unveiled plans for the world's longest non-stop commercial flight on Thursday, calling it the ‘last frontier of global aviation.’ (AFP)
Updated 27 August 2017
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Gulf hubs face leapfrog challenge of ‘last frontier’ non-stop flights

LONDON: Qantas Chief Executive Alan Joyce wants to conquer the last frontier of non-stop flights, in a move that could allow some carriers to leapfrog the Gulf’s big layover hubs.
The gleaming new airports of Dubai, Doha and Abu Dhabi have redefined long-haul air travel for the last decade by rivaling older and more established hubs in London, Paris and Amsterdam.
But Joyce wants to have the world’s longest commercial flights operational by 2022, knocking three hours off the London-to-Sydney route, where passengers can currently change planes in Dubai via a code-share agreement with Emirates.
Abu Dhabi-based Etihad Airways also offers passengers flying west from Australia the option of breaking their journey in the UAE capital via its partnership with Virgin Australia.
Now Joyce has challenged Boeing and Airbus to make the non-stop London-to-Sydney route a reality within five years.
“This is a last frontier in global aviation, the antidote to the tyranny of distance,” he said on Thursday after the airline reported near-record profits.
The big three carriers of the region — Emirates, Etihad Airways and Qatar Airways — have been able to capture an increasing share of global long-haul travel by funneling passengers traveling from Asia to Europe or North America through their hubs.
That has led to competitive tensions with their rivals in the US and Europe that accuse them of benefitting from state subsidies worth billions of dollars, which the Gulf carriers deny.
Rising traffic through the Gulf hubs has not only benefitted the airlines flying through them, but also the tourism economies of the region, most notably Dubai.
The emirate reported a record number of first-half arrivals this year, rising by about 10 percent to more than 8 million overnight visitors. Dubai is targeting 20 million tourist arrivals by 2020.
A Qantas spokesperson told Arab News that there are no plans to change existing schedules through Dubai, and that choosing either a non-stop or stopover flight is a matter of customer preference.
Indeed, the Gulf trio often encourages passengers to break their flights in the region by offering free layovers and discounted hotel deals designed to maximize tourism spend.
But business passengers may be less likely to book a stopover option when there is a non-stop alternative, say analysts, potentially hurting the highly profitable premium travel market.
Qantas has already committed to a non-stop route from Australia to the UK, with plans to start a 14,500-km service between London Heathrow and Perth starting March 2018.
The route, which will be served by the fuel-efficient Dreamliner aircraft made by Boeing, will be the first regular passenger service directly linking the UK to Australia.
Qantas on Thursday said that it would spend a year working with Airbus, Boeing and engine-makers before issuing tenders for versions of the A350 and 777X capable of flying longer distances.
But while the addition of the non-stop routes between Australia and the UK represents the start of a new chapter in long-haul travel, analysts say there may not be an immediate change to the overall narrative of the Gulf hub model.
“The commercial partnership with Emirates allows Qantas to serve many more European destinations than would be possible on their own, and has equally allowed them to refocus fleet capacity to more lucrative Asian markets,” said JLS Consulting aviation analyst John Strickland.
“Even with the onset of some non-stop Perth-London flights next year, Dubai will remain an important transfer hub between Emirates and Qantas.”
Will Horton, a senior analyst at CAPA — Centre for Aviation, agreed that the immediate competitive impact of the new Qantas non-stop routes will be contained.
“Non-stop to these cities is important for Qantas and could be successful, but it will be limited, leaving lots of traffic for other airlines,” he said.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.