Oman: Salalah, Wadi Shab

Below are pictures of Oman. I thought it could be interesting for travelers who may be slightly less familiar with the Gulf region, to see the diverse landscape of a region that sometimes gets affiliated with over-construction. In addition, of interesting note Oman (some say) is the  Gulf state (not including Saudi Arabia) that has the highest proportion of Arab hotel occupants / visitors - so perhaps it could be considered the locals vacation area, with interesting features to be appreciated.

Air Arabia, Jazeera Airways and Market Share

Gulf Air currently services 46 destinations and has bowed out of the long haul carrier business dominated by regional rivals Etihad, Qatar Airways and Emirates.  However, it is unclear what the future has in store for struggling major carriers as Low Cost Carriers such as Air Arabia, Jazeera Airways and Bahrain Air are rapidly growing. In some cases the Low Cost Carriers (LCC) service a greater number of destinations than the major carriers and the LCC's are gaining market share.

"Air Arabia, the largest low cost airline in the region forecast on Monday an annual average passenger traffic growth of 14-15 per cent over the next four years and said it would increase the number of routes from 67 to 75 by the end of 2011."

"Award winning airline Jazeera Airways today issued its operational performance report for the month of December 2010, which showed that it had a continued lead in market share over other Kuwaiti airlines on popular winter routes that were served in December 2010." 

If the trends of today continue into the future, what will the competitive landscape be for struggling major carriers like Gulf Air and Kuwait Airways up against lean LCC's? 

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2011/January/business_January418.xml&section=business&col=

The Gulf, Iran, and regional travel

Etihad, Qatar Airways and Emirates all have an established well regarded presence in the long haul carrier market. However, when we look at the immediate regional footprint of the six Gulf States, Iran, Turkey and Pakistan the ranking of activity looks different. The long haul carriers are not the most active carriers in terms of regional travel, in fact that ranking goes in descending order: Turkish Airlines, Saudi Arabian Airlines, Gulf Air, Iran Air then Lufthansa.


Are the Gulf long haul carriers under developing local regional travel?  May there be an overlooked opportunity?


Perhaps Gulf Air's opening of a new Iran route (Isfahan) bodes well for regional development, as Gulf Air will be focusing on the immediate perimeter.  “We are investing heavily in the region and beyond, within a three-hour radius. Then we’re opening up some new routes into Europe, Africa, areas like Azerbaijan - new economies that are currently underserved,”says Gulf Air CEO Samer Majali.

http://www.arabiansupplychain.com/article-5458-gulf-air-flight-takes-off-to-isfahan/

A transportation hub in the making: UAE

Few regions in the world are developing as much transportation infrastructure as the Gulf. Dubai airport expansion plans to raise capacity from 41 million passengers to 120-140 million and Qatar's Doha airport is following suit from 15 million passengers to 90 million. Oman is in the process of expanding its Muscat and Salalah airports and building four new airports. However staggering (and possibly questionable) this escalation in air transportation infrastructure is, it remains only part of the story of the ongoing transport development story.

Substantial growth is envisioned in terms of rail and sea simultaneously.

"The Department of Tourism and Commerce Marketing (DTCM) has been promoting Dubai...[and] expects a steady increase of 135 ships with 375,000 tourists this year...By 2012, we see an increase of 150 cruise ships with 425,000 passengers. We expect this figure to swell to 165,000 ships with 475,000 passengers by 2013, 180 ships with 525,000 by 2014, and 195 ships with 575,000 tourists by 2015.”

The bidding process is underway for a comprehensive railway system in the UAE. The objective is to establish a 1,500 kilometer freight and passenger network across all seven emirates of the UAE with full service by 2017. Eventually the system will connect UAE to Saudi Arabia in the West and Oman in the East.  Unlike India the Gulf States lack a railway system. This project has the potential to change the demographics and the lifestyles of the inhabitants of the Gulf States. To help envision this, consider that the Indian Rail site is the 10th most viewed site in India (see below), with more page views than linkedin and msn.com - a comprehensive railway system will impact general everyday life decisions.

Before that future can be reached more action is in store through the bidding process.  "China Railway Construction Corp [recently] built the $1.8 billion Mecca Metro between Mecca and the holy sites of Mina, Arafat and Muzdalifah, Saudi Arabia's first dual-track light railway, which opened in November to ease congestion during the annual Haj pilgrimage." Undoubtedly Chinese bid's will come with a lower pricetag than their European counterparts, however with economic protectionism currently ensnaring flagship Gulf carriers in Canada and Germany perhaps a cheaper pricetag and a more fair international business relationship will equate success in the coming railway bidding competition for the prize of $11 billion in railway projects.

Below are articles on the issue:

http://www.reuters.com/article/idUSTRE70B3YP20110112

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2011/January/business_January236.xml&section=business&col=

Canada, Germany, UAE and Protectionism

During a recession (or even when coming out of a recession) many countries conservatively seek to ensure their local businesses receive support to some degree. This is a normal course of action and can take on many forms from a one time tax break, subsidy etc... However, recently flagship carriers from the United Arab Emirates: Etihad (Abu Dhabi) and Emirates (Dubai) have encountered resistance from Canadian and German authorities regarding expanded travel routes. Etihad is only involved in the Canadian fray, but the two incidents occurring consecutively is telling of the environment within the industry.

President of Emirates Airline, Tim Clark says “It has taken European carriers donkeys’ years to adapt their business models to the changing dynamics of global civil aviation... They haven’t been able to align their traffic flows to what is going on, whereas we have.”

Will there be more clashes over routes in the near future as Qatar Airways and other buyers of the A380 seek to deploy their new carriers into the marketplace? How does this bode for the massive airport expansions underway in Doha, Dubai and Oman? Is it a possibility in the not too distant future that the same countries that sold these Gulf carriers their large aircraft orders will refuse them the landing rights to use them?

Below are links to relevant articles:

http://www.arabianbusiness.com/lufthansa-aims-to-take-gulf-carriers-down-says-emirates-chief--374243.html?tab=Article

http://www.arabianbusiness.com/lufthansa-seeks-clip-emirates-wings-in-germany-says-berlin-mayor-373861.html

http://www.reuters.com/article/idUSLNE70G01R20110117