The Middle East Comes Calling
Etihad has announced less than daily service to start to and from Dallas / Fort Worth to Abu Dhabi with a 777-200LR.
Now DFW airport will enjoy services to the Middle East hubs by Emirates (daily), QATAR and Etihad. If you think that suddenly that many people in the DFW area would like to fly to the Middle East, you would be wrong.
This is about developing a route to these hubs for follow on flights to these airlines other destinations in the Near East, Middle East, Africa and India. This is about feed and this is about gaining a customer base before American Airlines becomes too big and too strong on those very same routes.
Because you can believe that a big part of AA’s strategy will be to grow internationally and those Middle East carriers’ route strengths are places where AA is weak today. Dallas is a large and even growing IT hub and hires tens of thousands of contractors from India alone. These carriers are the popular airlines for those people to fly. The connections are more desirable and the service is perceived to be far better than any US or India based carrier.
Will it work for these carriers? I kind of think that QATAR has the best chance since it gave in and joined Oneword. American can feed that airline an immense amount of traffic. The question is. . . will Parker & Company see QATAR as an ally or a foe as they work to expand American Airlines reach and attendant profitability.
I think Emirates and Etihad may well can survive on that route on the traffic to and from India alone. Presently, there are many who travel to Houston first in order to take advantage of flights on those airlines to India.
Since PanAm shutdown, US air carriers have neglected the middle east and south asian markets. As you correctly point out, EK, QR and EY are the preferred carriers for most people travelling to those markets. I don’t see AA being able to compete.
There are very large south asian populations in the Dallas Metroplex and the Houston area. Even without the feed from AA, these carriers will have more than sufficient traffic. EK is the only one of the ME carriers that is not state-sponsored, but an independent and private entity. As a result, it has to be agile and responsive to the market. EK has tremendous feed into and out of India and the markets it is serving in the US are carefully chosen. I would argue that they are less dependent on feed from US domestic carriers — and that they are serving a very large number of Indian destinations that feed people to Indian desired US market cities.
If I’ve learned anything over the past 5 years, it’s to not discount what the airlines might do differently. Delta has led the pack in getting me to eat my words. My own attitude is to wait and see what happens when it comes to the Middle East. But. . . if I were sitting in the CEO chair at AA, I would direct that some routes be established to the Middle East and Africa over the next two years.
Partners don’t earn you lots of money. They just bring exposure to that route. Operating the route is what brings you lots of money. And it’s notable that the 787-8/9 that AA is due to receive fits nicely into developing such routes.
I think you’ve hit the nail on the head about partnerships and exposure. The 787 would be an excellent airplane to break into that market, which could open it up for the B777-300ER or B777-X if AA were to order them. I would only suggest that 2 years is too long. This new global society is moving ever quicker and corporate agility is a key element to surviving in it.
AA is likely behind the pace and will remain so for a while. 2 years may well be too long but I think they have an enormous amount of work to do on, quite literally, a global basis. That’s a lot to address even for an “A” team like Parker & Company.
But let’s sit back, cheer them on, celebrate the successes and honestly criticize the failures. It will be, if nothing else, fascinating to watch.
No doubt AA has a big mountain to climb. I wholeheartedly agree, cheer away and when there are bumps — honest, constructive, and objective critical analysis and proactive solutions to move on.
I really enjoy reading your blog. I appreciate the time and interest you put into it. Keep up the great writing!
Thank you Marco! Your compliment is appreciated but your comments are even more appreciated.
Greg