Friday, 29 April 2016

Open Skies, Or Not?

ASEAN has recently reached a milestone to open skies agreements and the establishment of an ASEAN Single Aviation Market, which will benefit customers with more choices as well as companies in being more cost-efficient.

Over in Europe, the European Commission has adopted a new Aviation Strategy for Europe with a Single European Sky, probably to tackle the fierce competition in the air industry by placing the EU as a leading player in international aviation whilst guaranteeing a level playing field.

Meanwhile, the open skies dispute between the Big Three of the US airlines (American, Delta, United) and the Big Three of the Gulf carriers (Emirates, Etihad, Qatar) is still ongoing.  The American airlines claim that the Gulf governments provided $42 billion in subsidies to their airlines, against open skies aviation agreements.  The Gulf airlines argue that the amounts are equity from their governments, who are the owners of their businesses, since the airlines are all wholly owned by the government.  The Economist in their analysis also cited the example of the generosity of the Gulf carriers to the media, which it felt was a conflict of interest in the reporting by the media.

What is undeniable are the investments by the Gulf airlines of other airlines. Qatar Airways had a 10% stake in British Airways’ parent company IAG which it upped to 12% recently, and it is eyeing more airline investments like Italy’s Meridiana and India’s IndiGo.  Etihad Airways had invested 49% in Alitalia, Italy’s national airline, as well as 29.21% in airberlin (Germany’s second largest airline) and 40%  in Air Seychelles (national airline of Seychelles).  Emirates Airline has an alliance with Qantas where Emirates gain access to 50 points in Australia and Qantas connects unto Emirates’ flights to more than 70 destinations.  To meet the rapid growth of Emirates Airline, the Dubai government is investing $32 billion for a new airport Al Maktoum International at Dubai World Central. Dubai International is already the world’s busiest airport having overtaken from London Heathrow in 2014 and 2015.

Open skies policy is a double edged sword.  Is it fair for private airlines to compete with government owned airlines? The amounts that governments can inject into their airlines business, whether it’s equity transferrals, interest-free loans or debt guarantees are generally not something that private companies can match up to. 





Thursday, 28 April 2016

An Interview With Mr Akbar Al Baker, CEO, Qatar Airways

A one to one interview with Mr Akbar Al Baker, CEO of Qatar Airways, moderated by Mr John Strickland, Director of JLS Consulting at the Arabian Travel Market 2016.

1.        What is the performance of Qatar Airways?

“Qatar Airways is able to reflect on a number of successes. This was a momentous way to end what was a truly historic year for the national carrier of Qatar which has seen, amongst other things, several top award wins, the forging of new partnerships, strong engagement on social media, the launch of a new aircraft type and the start of several new routes on both passenger and cargo networks.”  - Arabian Travel Market Official Show Daily

Qatar has recently won the Best Airport Lounge in the Middle East, and is the Best Airline in the Middle East, and Airline with the Best Business Class.  We want to beat Incheon for the Best Airport in the World.

Our results is the best ever this year, but the figures will only be released in June.  I know the numbers, but I cannot tell you now.


2.       Where are the investments of Qatar Airways?

We have invested 12% in IAG, parent company of British Airways, which we see as a rising star.

We are in discussion to invest in Italian airline Meridiana.  There is good potential to grow, unfortunately it has bad management and we want to change that.  We want to make it into a global brand, and a national airline that Italy will be proud of.  But we are very clear, we will only invest in it if the unions play ball with us, if the employees are committed to the airline, and if they want to make more money by working harder.

We were very interested to invest in IndiGo, the best run airline in India.  However, we could not invest in the initial public offer (IPO) owing to government regulations and then, there was lack of sufficient time for our sovereign funds to buy IndiGo shares.  But we are still very interested in IndiGo if there is another opportunity.


3.       How do you respond to the US’ allegations about unfair practices?

We have not violated any open skies agreement.  We have not done any harm to US carriers. An airline for a small country is an economic driver. We get equity from the government who is the owner of the business.  For seven decades European air carriers have received government subsidies. The US carriers have received post 9/11 Chapter 11 legal protection, which is a subsidy. Carriers under StarAlliance like Thai Airways, also receive subsidies from their government.   We will prepare a report and we will show that there is no evidence of the US carriers’ allegations. 

***

Watch - One to one interview with Group Chief Executive of Qatar Airways, Akbar Al Baker at the Arabian Travel Market 2015 here


This is a very candid guy, who does not mince his words. 




Tuesday, 26 April 2016

A Quick Analysis Of The Air Hub Strategies

1.       The Current Situation - Rise of the Middle East

The Middle East sees the rise of the air hubs of Dubai, Doha and Abu Dhabi.

Dnata, or Dubai National Air Travel Agency, is one of the world’s largest providers of airport services.  Part of the Emirates Group and wholly owned by the government of Dubai, it comprises more than 50 specialist businesses, including a comprehensive travel and tourism supply chain in Air Transport, Hotels & Resorts, Retail, Ground handling, cargo, travel and catering services, Food & Beverage, Tour Operator & Events Management, Travel  and Training.


2.       The Singapore Strategy – An Aerospace Hub

The Emirates Group is wholly owned by the government of Dubai.  In contrast, CAG was formed in 2009 to focus on airport operations and management, and air hub development of the corporatized Singapore Changi AirportCAAS continues its role as regulatory authority for civil aviation in Singapore, and has a role in the growth and development of the air hub and aviation industry.

Changi Airports International (CAI), a fully owned subsidiary of the CAG, seeks to invest in and manage foreign airports. 

CAAS aims to further strengthen Singapore's position as a regional air hub, and that in its next phase of growth, focus on innovation, connectivity and the clustering of related industries.  It hopes for companies to move up the value chain by taking on work in areas such as research and development (R&D), design, and manufacturing, as well as more advanced MRO work.  It is also looking beyond MRO, where there is the potential to become a design think-tank for aerospace original equipment manufacturers (OEM).


3.       Moving Forward – 3 Possible Options

A.      Government Involvement

“Singapore needs air connectivity and that's what we've been saying all the time. If we don't have the money as a company, somebody must pay.” - Liew Mun Leong, CAG chairman.


B.      Private Sector Leads

“Perhaps Changi can consider opening itself to retail investors so that there is some private investment, either in terms of bonds issued to the public or shares to retail investors, or both, with the Government retaining an important say on strategic decisions." - Terence Fan, SMU’s aviation specialist and assistant professor of strategic management.

An example of a private sector partnership sees SIA and Airbus teamed up to open a pilot training school here. SIA owns 45% of the Airbus Asia Training Centre and sees this as a key investment for the airline, as well as being in line with the carrier’s’ "transformative strategy to go beyond the core business into adjacent areas". – Goh Choon Phong, SIA chief executive officer.


C.      Government-Linked Companies Investments

Unlike Dubai, Singapore government lets the private sector take the lead in its business decisions.  Unless it is one of strategic importance e.g. in January 2014 Singapore investment company Temasek decided to partner the Singapore government to rejuvenate the Mandai wildlife and nature heritage precinct in Singapore.  


Monday, 25 April 2016

Arabian Travel Market 2016

The Halal Travel Market’s True Potential Unveiled:
“I believe there is a vast opportunity to develop halal travel experiences in the Middle East region, from resorts offering enhanced privacy for families, to comfortable surroundings for female travellers, to excursions that are alcohol-free and promote modesty.” – Nabeel Shariff, Founder and Director of Serendipity Tailormade

Technology Trends and Innovations:
“A ‘market of one’ refers to customer service so personalised that each customer feels like the company’s most important client … At every touchpoint, travel companies must build and sustain relationships with travellers that are tailored to their individual needs and situations.” – Bob Offutt, Senior Technology Analyst and Editorial Director, Innovation Edition of Phocuswright

Everything You Don’t Know about Bloggers and Blogging:
“Bloggers are writers, photographers, videographers, designers, marketers, and social media masters. The best description of a blogger is an online publishing entrepreneur … So, a more accurate term to use is ‘influencer’.”  – Matt Gibson, travel blogger and Inbound President of the Professional Travel Bloggers Association

some case studies: 
Matt Gibson - Professional Travel Bloggers Association http://travelbloggersassociation.com/
Shane Dallas - The Travel Camel, The Road Less Travelled http://www.thetravelcamel.com/
Gary Ark - Everything Everywhere http://everything-everywhere.com/
Mark Weins - Migrationoloy http://migrationology.com/
Maggie - Fly with Maggie http://www.flywithmaggie.com/
Jeff & Anne - What Doesn't Suck https://whatdoesntsuck.com/  





Friday, 22 April 2016

The Old, The New, And The Future Of Dubai

Old Dubai – old souk, spice souk, gold souk, the creek, fishing village, trading port

New Dubai – burj al arab, burj khalifa, dubai mall, dubai fountain, jumeirah lake towers, jumeirah beach residences, the palm, the earth

The future of Dubai –
Dubai appoints a minister of happiness, a minister of tolerance, and a minister of youth affairs; "national development based on core values, led by youth and focused on a future in which everyone achieves happiness."

* * * 

I must confess that I used to think that Dubai is a ‘showy’ city.  It has the tallest tower, highest dancing fountain, biggest mall, artificial islands etc. But of course, it has oil, it has the money!  

Then I was enlightened during the tours.  I was educated that the leaders of Dubai were very visionary.  Before oil was discovered in the late 1950s, they decided to create a creek so that by the time oil was found in 1966, Dubai remains a trading port.

The leaders also knew that oil is not limitless.  One day the oil will run out.  But what is limitless is its people’s imaginations.  So they built Dubai into a financial centre, and a retail and family-friendly tourism destination.  They built the tallest, highest, biggest, to show its people to dream big, and that nothing is impossible.

So now I look at Dubai as a city of possibilities.  Not because it can afford to, but because it can.  

old dubai - abra

new dubai - burj al arab

Thursday, 21 April 2016

If God Wills It

I learnt a new word yesterday.  A group of friends were exclaiming how frustrating it is to work in Dubai.  “They don’t listen to you!” exclaimed one. 

They ask me, do you know what “Insha’Allah” means? 

“No.”  I replied.  “What does it mean?”

“It means “If God wills it”, and they use it for everything they do!”  Can you do this?  Insha’Allah.  When can you do it? Insha’Allah.  Do you speak English? Insha’Allah.  “It is so frustrating!”

I can feel their exasperation.

I looked it up, and Ibrahim Al-Ammar from Arab News gave a very good explanation.  He said, “Don’t fear the word!” 

He explained that Insha’Allah is part of a Muslim’s daily vocabulary as they were taught in Islam that only God knows what will happen, so they should not make any definitive statements about the future.  Also, it is more respectful to say “Insha’Allah” instead of plainly “OK.”

Ah … I see. 

But the problem is, people have come to see the word quite literally, and unfortunately, it has taken on a new, but undesirable meaning. 

So, Insha’Allah. Don’t worry.  Whatever will be, will be. 


#crossculture

* * * 

On another note, Dubai takes good care of its Women & Children, and the Rich.  As seen in the Dubai Metro: 









Tuesday, 19 April 2016

The Singapore Strategy – An Aerospace Hub

The first impression of Dubai is, it is very similar to Singapore in many ways – its multi-culturalism, the skyline with its high rise buildings, the wide highways and its traffic jams, the many shopping malls and the range of dining eateries.  But this is not surprising.  Changi Airports International (CAI), a fully owned subsidiary of the Changi Airport Group (CAG) had a six-year management contract to operate King Fahd International Airport in Saudi Arabia since 2008, as well as an 18-month operations management contract with Abu Dhabi Airports Company in 2006 – 2008 to help the local management towards improving operational standards and customer service quality.  UAE government officials were also known to visit the Singapore government agencies for knowledge learning. 

There is one key difference though – Singapore is a tropical garden city and Dubai is in the desert.  Perhaps that is why Middle East visitors especially love our gardens; Botanic Gardens (newly minted UNESCO site since July 2015), Gardens by the Bay (Cloud Forest, Flower Dome).

However, we will never be as aggressive as Dubai in rolling out their plans because of the different ways our governments work. The UAE consists of seven emirates: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah, and they are rich in oil. The President is the Ruler of Abu Dhabi, and the Vice President and Prime Minister is the Ruler of Dubai.

In Singapore, the government is always wanting the private sector to take the lead in its business decisions, unless it is one of strategic importance.  This was the case in January 2014 when Singapore investment company Temasek decided to partner the Singapore government to rejuvenate the Mandai wildlife and nature heritage precinct in Singapore. 

An example of a private sector partnership sees on 19 April 2016 reported in The Straits Times, SIA and Airbus teamed up to open a pilot training school here. When fully operational by 2019, the training facility in Seletar Aerospace Hub will be Airbus’ fourth and largest training centre.  SIA owns 45% of the Airbus Asia Training Centre and sees this as a key investment for the airline, as well as being in line with the carrier's "transformative strategy to go beyond the core business into adjacent areas" said its chief executive Goh Choon Phong. He said this is necessary with strong competition from full-service and low-cost carriers.

In its aviation industry, the Emirates Group is wholly owned by the government of Dubai.  In contrast, CAG was formed in 2009 to focus on airport operations and management, and air hub development of the corporatized Singapore Changi Airport, while the Civil Aviation Authority of Singapore (CAAS) continues its role as regulatory authority for civil aviation in Singapore, and has a role in the growth and development of the air hub and aviation industry.  A close look reveals that there could be an overlap in the air hub role by both CAG and CAAS.

The strategy, it seems, is for CAG to expand its CAI to invest in and manage foreign airports.  CAAS on the other hand, looks to expand Singapore’s aerospace industry and has seen its maintenance, repair and overhaul (MRO) cluster grown to over 100 companies (20% of the Asia-Pacific MRO market). This is an average growth of 13% since 1990, the aerospace industry now an integral economic driver of Singapore.   ST Aerospace and SIA Engineering Company, both home-grown companies, are world-class leaders in heavy aircraft maintenance, ranked first and fourth respectively in 2008, in terms of total man hours expended. 

According to the CAAS, the Singapore air hub strategy is thus to expand the Singapore aerospace industry, for companies to move up the value chain by taking on work in areas such as research and development (R&D), design, and manufacturing, as well as more advanced MRO work.  Right now, Singapore is home to the research centres of major companies in the aviation industry and the aerospace companies in Singapore are moving into new repair development, innovating existing processes and technologies to obtain more cost-effective and productive outcomes, and reducing the scrap rate of incoming aircraft components.  We are also looking beyond MRO, where there is the potential to become a design think-tank for aerospace original equipment manufacturers (OEM).

Will this aerospace hub strategy, to move the aviation industry up the value chain work, and work timely enough, to compete with the emerging Middle East air hubs? 

The Dubai skyline

The  Dubai desert


Monday, 18 April 2016

STB Middle East Trade Workshop

According to the STB, Singapore welcomed 15.1 visitors in 2014, down 3% from the previous year.  Tourism receipts remained flat at $23.6 billion.  On a brighter note, tourism receipts per capita increased 4% to $1,561.  Visitor days also increased 3.4% to 56 million days and average length of stay increased 6% from 3.5 days to 3.7 days.    

Visitors from West Asia (including Iran, Israel, Kuwait, Saudi Arabia and UAE) number 170,154, an increase of 8.5% over the previous year.  Specifically, UAE’s numbers were the highest in West Asia at 75,742, an increase of 4.4%.  It is said that the key purpose of travel is medical tourism; everyone would know at least someone who has been to Singapore for medical treatment.  The industry is also looking towards Iran now that sanctions have been lifted, as Iran’s population is more than 50% of the West Asia market.

At the STB Middle East Trade Workshop on Sunday 17 April 2016, Area Director Middle East & Africa Mr Mohamed Firhan said that STB is stepping up its marketing efforts with the trade in the region.  There was a lapse of contact with the industry for the past few years, but they are ramping up the trade events and roadshows in the past 1-2 years again.

It was also highlighted that while Dubai consumers may deem Singapore to be an expensive destination, in reality, we need a perspective change.  Instead of comparing Singapore to our South-east Asian neighbours like Malaysia and Thailand who may be cheaper, we should compare Singapore with cities like Tokyo, London and New York, where our destination offerings are similar.  We want to sell our shopping and dining experiences, which are on par with places in Tokyo, London and New York.  UAE consumers have no qualms spending for example, six nights in luxury in London, so they should compare Singapore with those prices and experiences.  We want to show the consumers that Singapore has a range of food and dining experiences, from the affordable like food centres to the high-end like celebrity chef restaurants, from shopping at marketplaces to designer wear at Orchard Road.

At the tradeshow, STB offered its Middle East trade partners a glimpse into Singapore via the Samsung 360 virtual reality camera that offers users a 360 panoramic view of the city’s attractions.  Many of the trade loved the gadget and were amazed at the realistic city views.  They especially loved places like Sentosa and the gardens such as Gardens by the Bay (Cloud Forest) and Botanic Gardens (newly minted UNESCO site since July 2015).  This could be due to the lack of lush greenery in Dubai, unlike Singapore’s tropical rainforest climate.     

Some tools for the trade shared included the STB Content Hub with more 20,000 images and videos at https://www.stbcontenthub.com/.

Following the trade workshop in Dubai, the fifteen companies comprising delegates from hotels, tour operators, airline (SQ), shopping mall (ION Orchard) and integrated resort (RWS) from Singapore and UAE will continue to roadshows in Kuwait, Qatar and Iran.  









welcome dinner for delegates







Presentation by STB
Presentation by SQ

Saturday, 16 April 2016

Big Is Good?

Dubai is famed to have:

·         The world’s tallest tower – Burj Khalifa;
·         The world’s tallest dancing fountain - The Dubai Fountain;
·         The world’s biggest mall - The Dubai Mall, which has more than 1,200 stores and houses an Olympic-sized ice skating rink, and the Dubai Aquarium & Underwater Zoo;
·         The world’s largest themed shopping mall - The Ibn Battuta Mall, designed in honour of Ibn Battuta, a famed Arabic explorer.  The mall’s six courts draws design inspiration from Andalusia, Tunisia, Egypt, Persia, India and China, places where he travelled;
·         The world’s largest Ferris Wheel - Dubai-I, the biggest attraction in Venu Bluewaters Island Hotel, a new leisure concept from the Jumeirah Group when it’s completed in 2017.

For the first time in the Middle East, Dubai will be hosting World Expo 2020, as it also kicks off the country’s Golden Jubilee anniversary celebrations.  About 25 million visitors are estimated to visit the Expo, and Dubai is already planning to build:

·         A new airport – the five-runway Al Maktoum International Airport that will be able to accommodate 160 million flyers a year after it’s completed in 2020;
·         A new The Tower at Dubai Creek - taller than the Burj Khalifa; inspired by the mythical hanging gardens of Babylon.  The tower would be a "gift to the city before 2020" says the Chairman of Dubai-based Emaar Properties Mohamed Alabbar, the company behind the Burj Khalifa, also behind the new tower.

So does ‘the bigger the better’ hold true? It is definitely a short cut way to put a destination on the map very quickly. Everyone wants to see the biggest, the largest, the best.  However, in a world that is so internationalized now, the bigger of something may just be the same everywhere else.  The biggest, largest, best may draw people, once.  To draw them back again and again, this is where we may have to connect the soul of the place with the people who are visiting it. Information is no longer sought for information’s sake (because it is too easy to get information nowadays), but the information must be inspiring and surprising.

This is where the concept of sharing live stories to connect with visitors may be useful.  Sharing stories also mean that there must be a person-to-person connection, and no longer just one-way information giving to visitors.  In a Forbes article “Tap the Power of Storytelling” dated 4 January 2014, Geoffrey Berwind, a professional Storytelling Consultant and Trainer who’s created storytelling projects for historic sites and provides consulting services for leaders and companies says that “people buy from people they know, like and trust”, (like key opinion leaders or influencers*) and that “great leaders recognize that human connections need to go before concepts and strategies.

Small is good too.  Small has charm.  We have hope. 

*STB Dubai works with travel blogger Michelle Karam at http://traveljunkiediary.com/ for their social media marketing. 

Sources:
Retrieved from http://www.visitdubai.com/en/articles/new-hotels-in-dubai
  
Dubai Mall
Dubai Mall

The Aquarium in Dubai Mall
The Souk in Dubai Mall
The Waterfall in Dubai Mall
The Piano in Dubai Mall

The Village in Dubai Mall
The Dubai Fountain

Burj Khalifa

Burj Khalifa

Friday, 15 April 2016

The Case Study Of Dnata

In 2014, Dubai International Airport handled 70.5 million passengers and became the world's busiest international airport (“Critical for Changi Airport and SIA to join hands,” 2015), taking its title from London's Heathrow for the first time.  Changi Airport, on the other hand handled a record 54.1 million passengers but showed a 0.7% growth over the previous year, its lowest since 2009.

How did Dubai make this happen? 

Stewart Angus, who has worked for the Emirates Group for 19 years and oversees international business for the group’s Dnata ground-services unit says that “The success is Dubai’s location – it’s Europe’s most easterly hub and Asia’s most westerly hub.”  Daniel Tsang of Hong Kong consultancy Aspire Aviation adds that “In terms of charter traffic, 25% of Australia-to-Europe traffic has shifted from Hong Kong and Singapore to Dubai in the last couple of years.” (“How Dubai became one of the most important aviation hubs in the world“, 2014).

Who is Dnata?
 
Dnata, or Dubai National Air Travel Agency, is one of the world’s largest providers of airport services that comprises more than 50 specialist businesses.  Part of the Emirates Group, Emirates and Dnata learned from Singapore which saw Singapore Airlines’ partnership with Singapore Airport Terminal Services (SATS).  Industry sources say Dnata started first, and when Emirates became well-known, Emirates Group was then created. 

Dnata’s annual revenue increased 75% to $2.1 billion in 2013, while SATS’s revenue rose only 5.2% from 2011 - 2013 to $1.45 billion.  More than 40% of Dnata’s revenue now comes from Australasia, partly as a result of a series of acquisitions starting with its first international deal ten years ago when it bought Singapore ground-handling company CIAS. So now Dnata Singapore has a part in the baggage-handling business at Changi Airport, as well as ground services at Guangzhou Baiyun International Airport, and Xi’an Xianyang International Airport plus ten smaller airports in western China as part of Dnata’s Asia joint venture business.

How can Singapore compete?  

The Civil Aviation Authority of Singapore (CAAS) will support productivity projects with up to S$17 million in grants to improve cargo- and baggage-handling services (“Changi Airport to boost productivity,” 2015). Mrs Josephine Teo, Senior Minister of State for Transport said “The aim is to further strengthen Singapore's position as a regional air hub”, and that in its next phase of growth, “Changi Airport will focus on innovation, connectivity and the clustering of related industries.” 

When completed, T5 is likely to be the third largest passenger terminal in the world, after facilities in Dubai and Beijing and will take Changi to 140 million passengers a year (“Changi Airport's T5 will be 10 times as big as VivoCity,” 2015).  Associate Professor Terence Fan, a transport specialist from the Singapore Management University, said: "Perhaps Changi can consider opening itself to retail investors so that there is some private investment, either in terms of bonds issued to the public or shares to retail investors, or both, with the Government retaining an important say on strategic decisions."

What more should be done?

Etihad has set up travel agent Hala Group, which could put pressure on Dnata’s $180 million travel services division. It is estimated that six out of top ten Asian megacities of 2030 to be in either China or India.  A map of the Asian megacities in 2030 sees Chengdu and Kunming in the geographic centre of the cluster, and they could be the hub for China-India traffic (“Joining up the dots: non-stop air services between Asia’s megacities,” 2016).  What is our role then?

“Singapore needs air connectivity and that's what we've been saying all the time. If we don't have the money as a company, somebody must pay, says Mr Liew Mun Leong, Changi Airport Group chairman. 

The question is - who, must pay? 
Arabian Adventures, part of the Emirates Group. Source: https://www.arabian-adventures.com 
Emirates Aviation University, part of the Emirates Group. Source: https://www.eau.ac.ae
Emirates Academy, in academic association with EHL, part of the Jumeirah Group. Source: http://www.emiratesacademy.edu



Thursday, 14 April 2016

A Chat With Mary Charny Faith Intacto, Senior Business Development Manager, Dubai, IE Singapore

1.       So, how long have you been in Dubai?

I am originally from the Philippines. I have lived and worked here for ten years.  I worked two years in a private company in Dubai, before joining IE Singapore.


2.       What do you do in your work?

I facilitate Singapore companies who want to do business in Dubai and the Middle East.  We provide information and resources to them, and connect them with their counterparts here.  I am in charge of the hospitality sector which includes lifestyle, food, retail, healthcare and education. 


3.       What do you like about Dubai?

The food and shopping! 

Thank you, Mary. 

Mary and George, in the IE Singapore-STB shared office