Middle East to become hub of global aviation industry

Speaking at the inaugural Dubai Business Travel Show, Al Rais said that Middle East airlines are able to develop hubs for non-stop flights to virtually any point around the world. Moreover, the modern airport and economic infrastructure, together with the ambitious growth plans of the GCC countries make it a highly attractive centre for conducting world business, he said.

And speaking to Khaleej Times he said: "If we (the airlines) don't prepare and organise ourselves by developing our infrastructures to make the Middle East the centre of world travel so that people can travel from here to any other part of the world in 16 hours, someone else will take up the opportunity and bypass us." He also commented on the fact that China Airlines is going to set up a service base at Dubai World Central in Jebel Ali. "It is going to change the dynamics of doing business," he said.

The value of business travel is significant and growing. In 2007 it is estimated to be worth $743 billion, nearly 20 per cent of the world's total travel business. And business travel in the Middle East is estimated to be worth 25.3 per cent of the region's total travel business, or $15.9 billion. By 2017, business travel in the Middle East is estimated to be worth $30.5 billion.

Not only will the region's airlines benefit from average passenger growth rates than other regions — 6.8 per cent between 2007 and 2011, according to IATA figures — but Middle East airlines have cost advantages over their US and European counterparts. Al Rais said: "On a like for like basis airlines in the Middle East have an estimated 18-21 per cent long-term total unit cost advantage over American and European carriers, but are on par with Asian competitors." He added: "The benefits are mainly due to low labour-unit costs and lack of unionisation."

Middle East airlines must also make the most of the fact that the aviation business is a global one. "We are in an international business, not a regional business. We have to strategise ourselves this way. It is important that we position ourselves beyond the Middle East. The Middle East is not good enough," he said.

Global passenger projections for 2011 are 2.75 billion passengers, up from 30 per cent from 2.10 billion in 2006. "Looking to the future, global passenger numbers will double every 15 years and triple every 23 years,' said Al Rais. "Overall the world's population will rise to 8.5 billion by 2050, which provides plenty of opportunity for airlines in the Middle East to capitalise on transporting passengers to an from all parts of the globe," he added.

To meet growing global demand for air travel the capacity of airports in the Middle East is projected to increase from 82 million currently to 400 million in 2012. Dubai World Central at Jebel Ali will be the largest airport, able to service up to 120 million passengers annually, followed by Dubai International Airport (70 million) and Doha International Airport (50 million).

But there are challenges ahead for the region's airlines. Not only are they finding it hard to recruit qualified staff but they also have to face the problems associated with increasing fuel costs, highly regulated landscapes, security, and changing consumer travel behaviour, said Al Rais.

Qatar Airways, whose principle differentiator is its people-focused products and service, operates 60 aircraft and will have 75 operating by the end of next year, he said. By the end of this year the airline will have launched 11 routes. It will start the Doha-Stockholm route on 23 November.