Etihad CEO James Hogan: “We are quite literally at the center of the world. We can fly to all points of the world nonstop” from Abu Dhabi.
Etihad Airways president and CEO James Hogan was in Washington DC this week for the launch of the Abu Dhabi-based carrier’s new service to Washington Dulles, and a theme of his visit was promoting Abu Dhabi as a global connecting hub.
“We are quite literally at the center of the world,” he said. “We can fly to all points of the world nonstop” from Abu Dhabi, and by extension, connect any two destinations via one stop in the United Arab Emirates’ capital.
Emirates and Qatar Airways make a similar case for Dubai and Doha, respectively, and even Ethiopian Airlines views Addis Ababa as a global connecting hub. Can all of these cities be future mega-hubs connecting traffic to all points of the world? From the perspective of mature air transport markets in North America and Europe, there is some skepticism that all of these hubs will thrive 15-20 years from now. The Gulf carriers' belief in the global hub concept has led Etihad, Emirates and Qatar to place significant aircraft orders and Abu Dhabi, Dubai and Doha to invest in major airport expansion.
During a Q&A session after Hogan gave a speech this week to the International Aviation Club, I asked him whether there’s enough traffic for all of the big three Gulf carriers to realize their lofty ambitions. “If you look at the emerging markets … there’s more than enough traffic,” he said. “There’s plenty of room for all of us.”
The key is the emerging markets and the Gulf carriers’ position on the world map. While North Americans and Europeans tend to get caught up in Etihad, Emirates and Qatar trying to win one-stop service via their base hubs between, say, major US cities and major Chinese cities, the Gulf carriers are focused on all of the potential traffic developing in emerging markets. Yes, the Gulf airlines definitely want to gain a decent share of that US-Asia traffic, but their full ambitions are predicated on newly emerging passengers in still-immature air transport markets.
The Gulf hubs will “connect many markets in Africa, the Indian subcontinent and China where you won’t see a US carrier,” Hogan said, noting a potential market of 1 billion passengers within a 3-hour flight of Abu Dhabi.
Hogan pointed to a rapidly emerging middle class in India, the huge population of young people in the Middle East and the large number of secondary cities in emerging markets that now have little-to-no air service. “We’re filling a gap in the market,” he said. Will that gap be big enough for all three big Gulf carriers (and perhaps Ethiopian too)? Time will tell.