Middle Eastern airlines with plenty of oil money are threatening the Korean aviation industry.
The Korean government started a two-day aviation talks with the United Arab Emirates (UAE) in Abu Dhabi on Aug. 7. The UAE side has reportedly asked Korean authorities to more than double the number of services from Incheon to the UAE (Dubai and Abu Dhabi). The Korean aviation industry is concerned that expanded flights on the routes would absorb passengers using their Incheon-Europe services.
During the aviation talks last year, the UAE side demanded that flights from Incheon to the UAE be at least doubled.
Currently, the UAE’s Emirates operates seven flights a week on the Incheon-Dubai route, while Etihad Airways, the second largest airline in the UAE, flies from Incheon to Abu Dhabi seven times a week. The two airlines want to increase the two services to at least 14 times a week, respectively. "Last year, the Korean side suggested that the two countries expand the services to a level that can benefit both of them. We have been maintaining this position," said an official of the Korean Ministry of Land, Infrastructure and Transport.
Currently, Korean Air is the only Korean airline to fly between Korea and the UAE. It operates seven flights a week between Incheon and Dubai. If the UAE’s demand is accepted at this meeting, Korean Air's Incheon-Dubai line will be directly hit. However, the Korean aviation industry is more concerned about losing passengers on flights to Europe. In fact, according to International Air Transport Association (IATA) statistics, 72 percent of Emirates passengers and 63 percent of Etihad Airways passengers transferred to Europe or Africa via the UAE last year.
Ticket prices of UAE airlines are usually 20 to 30 percent cheaper than those of Korean Air. In addition, UAE airlines put into operation the latest A380 passenger aircraft with more than 480 seats, while Korean Air uses the A330 with 218 seats on the Incheon-Dubai route.
For these reasons, not only Korean airlines but also foreign aviation companies keep a watchful eye on their Middle Eastern competitors. On Dec. 12, the chief executive officers of American Airlines, Delta Air Lines and United Airlines jointly carried an article in USA Today, asserting that Middle Eastern carriers were engaged in unfair competition based on government subsidies. Indeed, Qantas of Australia eliminated most of its direct flights to Europe. European airlines, including Lufthansa of Germany and Air France, also have withdrawn from some Middle East and Asia routes.