Interviews With Industry Partners (DXB)

1. What are the reasons that have led to the rapid growth of the air hubs in the Middle East?

The rulers gave the team that set up the airline a carte blanche to do whatever it takes to create a successful airline. This non-intervention approach allowed the airline executives the freedom to take risks and leverage on its obvious strategic location. The airline is not public-listed, so there is no pressure of return on investment.  The government does not subsidize the airline, but through an investment arm they are the biggest shareholder. The airline has the advantage of unwavering government support for infrastructure development, zero tax, great location, and because they are a private entity, they can react to the market very quickly.

2. What are your company/organisation/country’s strategies to compete in the aviation/ tourism industry? 

The airline’s strategy is to grow code sharing arrangements, and it takes up equity in many other airlines to break into new markets. As a new airline, it is trying to penetrate the market and they are willing to fly to untested secondary cities which they think will grow in the future. ‘They are like the precocious and audacious boy who has rich and forgiving parents.’ The rulers want to diversify away from oil revenues and will do whatever it takes to build their airlines and airports into world transport hubs. They are everywhere with their sponsorships and advertisements, and they are very supportive to tourism associations and organizations e.g. it’s much easier to get free tickets for familiarization trips from the Middle East airlines then SQ.

3. How do you think Singapore can learn from and respond to this competition?

SQ is still a very good product, very good customer service, food, in-flight entertainment and overall great experience. They are a hub to South-East Asia but these days they are focusing on more direct flights, to beat the Middle-East airlines’ stopover programmes.

SQ has proven its astuteness but it needs to respond to the market more quickly. A good step taken is the equity ventures they are forming in India and other countries but they’re still slow and too cautious. ‘SQ cannot be run by scholarly technocrats focusing on cost management rather than revenue growth.’ They need to be able to build personal relationships, take risks, challenge the old paradigms etc. The Middle East airlines hire people from all around the world to do its bidding, take risks to beat the odds. This is full throttle globalization.

*The industry partners from airlines, attractions and NTOs preferred to remain anonymous.