Gulf airlines prove they now call the shots

Qatar Airways' outspoken chief executive gave planemaker Airbus a blunt lecture on strategy at the region's air show, telling the European group to "go back to basics" before changing tack and placing a $6 billion (Dh22 billion) order for at least 80 new planes — hot on the heels of a mega $18 billion order for Boeing from Dubai-owned rival Emirates. The cash-and-swagger confidence may seem like hubris. But it underscores how Gulf carriers are gaining altitude over the industry. There is one big advantage Gulf airlines have over rivals. Advancement in aircraft technology mean many long-haul flights now require just one stop, and the Gulf is perfectly located between the East and West. A third of the world's population is within a four-hour flight. What's more, everything is new. Airports and aeroplanes are more efficient. Global airline industry net profit will shrink 40 per cent next year to $4.9 billion, or less than a third of 2010 levels, according to the International Air Transport Association. More than coping But three Gulf carriers are more than coping. Emirates, the world's largest airline by passenger numbers, accounted for roughly 20 per cent of the industry's profits last year. Etihad reckons it will break even this year. And Qatar Airways has made a net profit for the last two years with 30 per cent year-on-year route expansion. A weak global economy is expected to at least halve Middle East growth in passenger traffic from 20 per cent last year. But it makes sense for Gulf carriers to continue full throttle with plane orders if they can remain profitable in a downturn.