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Gulf airline 2015 expansion: Italy growth highlights competition between Etihad, Emirates and Qatar


Competitors sometime assume the three Gulf network airlines – Emirates, Etihad and Qatar Airways – have a coordinated strategy. The reality is they are fierce competitors with individual motivations and nuances. The Italian market is a strong indicator of this: Etihad’s acquisition of Alitalia gave it a significant boost in the market. Emirates, the largest, is looking to maintain its lead while Qatar Airways, once comfortably second largest, is being overshadowed.

Italy is the sixth largest growth market for the three Gulf airlines in 2H2015. Gulf carriers will have about 1,035 extra seats to Italy compared to 2,352 to the US (the largest growth market) 1,954 to the UK (second largest) and 1,903 to India (third largest). In percentage terms, Gulf carriers growth of 24% in Italy is outpaced only by the 28% growth in the US. Among other developments, Emirates is launching the first Gulf link to Bologna, bringing to four the number of Italian cities linked to Gulf hubs. But this expansion to Bologna comes as Emirates shifts capacity from Rome. Etihad and Alitalia are paring back growth plans from what they expected at the start of 2015, while Qatar Airways is planning faster growth.

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Understanding the Asia Pacific growth opportunities: Tony Fernandes explains the market

No-one doubts that Asia will become the dominant world aviation market over coming decades. North America and its airlines will necessarily be major beneficiaries of that expansion. For the time being however, the US-China market is only one third the size of US-UK’s and much lower yielding; Asia’s two biggest markets, China and Japan combined are still smaller than the UK market. But China-US capacity will double in the two years to Jul-2017, a trajectory that is likely to continue.
Meanwhile the nature of the Asian aviation markets has evolved greatly over the period of a decade. In Southeast Asia, nearly two thirds of all airline seats are on low-cost airlines, none of which existed a decade ago, implying a highly price sensitive underlying market.

In North Asia, this low-cost, price sensitive phenomenon is starting to take hold as well, albeit from a much lower market share. But it is growing fast, with many new entrants.

To understand fully how these forces will influence Asian consumer demand, we hear from Malaysia based Tony Fernandes, the man who sparked the LCC revolution in Asia and whose airline, AirAsia, has now carried 50 million passengers. In doing so, he has effectively deregulated international aviation across much of Asia.
The remarkable airline, with 9 operating entities, including cross border joint ventures in various countries, also includes three long-haul low-cost operators.

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