News about the launching of new airlines by Saudi Arabia was received by industry watchers with surprise together with tinge of sarcasm. Already their flag carrier Saudia is in the dog house. Instead of restructuring & rebuilding it why Saudis are looking for a brand new airlines. It is all about geoeconomics. Read for more…
Configuration of the proposed airline raises the question whether it is a pipe dream or a diversionary tactics to keep the restive and disgruntled population in Saudi Arabia under check. Whatever the obvious reason is the graphics are just unbelievable. Looking forward to serve 250 destinations, handling 4.5 million tonnes pf cargo per annum and to top it all catering to 100 million travellers annually, the airline goals appear to be outside the realm of credulity even though these are milestones to be achieved by 2020.
In comparison, Emirates is only serving about 160 destinations and Qatar Airways landing somewhat higher at 172. Due to pandemic, Emirates suffered almost 65% drop in revenue slated at US$ 9.7 Billion incurring the first time loss of US$ 5.5 Billion in its 30 years of operation. Both Qatar airways & Emirates are pruning down non-essential staff and lowering their goals in the recovery period aftermath that could possibly begin in 2022.
The plan to float new airlines is paired with limiting the existing flag carrier Saudia to ferry only religious travellers. Already Saudia is considered by travellers as least comfortable airlines in the Gulf region. By relegating Saudia it emerges that religious travel may not last as the primary revenue sector for the country. At present, Saudi Arabia received about 18 million arrivals 90% of them being religious travellers, who however contributed US$ 20 Billion in cash to the coffer.
The tall claims made in relation to the new airline proposal do not hold water, though. The real reason is Saudi Arabia is stung by the dynamism exhibited by UAE & Qatar, especially the former in the field of geoeconomics. Dubai, Abu Dhabi and Doha are international airports that are kept busy even during pandemic days. Not only that, geoeconomics power play is evident in both countries as regards to travel, tourism, trading, free zones manufacturing and in a single word connectivity.
Besides both UAE & Qatar are seen by Saudi Arabia as upstarts punching above their weight. The way Qatar weathered the storm of boycott by Gulf Council is a testament of her strength and power in geoeconomics. UAE went a step above and signed up Abrahamic Accord that intend to legitimize Israel in Arab eyes. Both UAE & Qatar are leveraging risks & opportunities in geoeconomics to become influential players in the back yard of Saudi Arabia.
But what stung Saudi Arabia most was the vetoing by UAE of 10% cap on oil production proposed by Saudi Arabia. How come the one-time sea pirates do such thing to the noble Saudi Arabian princes who double as custodians of holy mosques? Saudis are expressive & in a way explosive. They want to cut to size these spoiled brats. So the new airline story is being floated to hang Democleon Sword over Emirates & Qatar Airways.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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