Attending the MRO Middle East conference and exhibition in Dubai was, to a certain extent, going back to a previous life for me. Back in the 1990s I spent several years working in the rapidly growing Emirate working for the Dubai World Trade Centre, an independent British bank, and then for my own public relations company.
Emirates Airlines was then the ‘upstart on the international airline block’; rising out of the sand to challenge the established national carriers, predominantly from Europe and southeast Asia, to become the first of the Gulf hubs. British Airways had to ensure its flights from London had the latest inflight entertainment system in order to keep passengers from deserting to experience the wonderful seat-back screened content on every Emirates flight to Europe.
Wind forward just a couple of decades, and the Gulf/Middle Eastern market is now full of national carriers and burgeoning low cost players, most of which are founded on national oil and gas wealth. Emirates Airline is now in the top five airlines in terms of international passengers carried each year.
But the oil price slumped and has not yet roared back to the heady days of US$90-$100+ per barrel during 2010-14. As Air Arabia’s group CEO Adel Abdullah Ali said during his opening address at the MRO Middle East conference: “The oil price is like blood pressure; it should neither be too high or too low.” He said the right price was between US$70-80 per barrel, whereas the price for the last two years has averaged less than US$50 per barrel, and dipping at its lowest point to around US$30 per barrel.
That gap in income has hurt the Gulf’s oil producers although there is still almost an air of denial which permeates the region. Spending on infrastructure and airport expansion continues at pace, with Dubai looking to move Emirates Airline and many other services into Dubai South, and away from its city centre location which has grown out of all proportion over the last 20 years.
In the State of Qatar, the third phase of the project to expand Hamad International Airport (HIA) in Doha is due to begin this year. According to Akbar Al Baker, group chief executive of Qatar Airways, the new expansion will “take the ultimate capacity to over 65 million passengers (annually).” However, Qatar has huge natural gas reserves to fall back on…and price cutting to win passengers has not gone down well with the other Gulf carriers.
Ali also pointed out that airline behaviour has not matched economic reality. “There have been too many aircraft orders….which have exceeded growth expectations. Regional carriers also want to get into the GCC (Gulf Cooperation Council) market.” As the regional competition ‘hots up’ and while it remains a great time for the buyer, Ali wondered whether it was sustainable.
What this has done is create a demand for a much larger workforce in the aviation industry at all levels within the region. However, as Ali said, the cost of manpower within the Gulf continues to rise at a significant rate. “Today it is cheaper to recruit a pilot from the UK or Australia than from the Gulf,” he observed
The expansion has naturally led to the need for more maintainers too, who need to be suitably qualified. But therein lies a problem. Many of the airlines within the Gulf are selective about which international qualifications they will accept. In some cases, well qualified and experienced individuals are not considered because they do not have a qualification which is recognised by a particular organisation or at a national level. There also seems to be no quick solution to ‘fast track’ such people, other than by making them start at the beginning to requalify – a process that can take years. The result is that rising demand for experienced maintainers is very quickly outstripping supply.