Tuesday, October 30, 2007

UAE -Spain open skies

UAE and Spain have signed an open skies agreement over the weekend which includes 5th freedom rights beyond Spain to the Americas for UAE based airlines. The designated airlines of both countries will be able to operate unlimited weekly passenger frequencies and capacity in each direction with any type of aircraft, as well as operate all cargo services.

Analysis :

For many months prior to this agreement being signed, EK was conducting a feasibility study on launching new DXB-BCN nonstop flights as well as future flights to Mexico City which would be routed via Spain as UAE too has an open skies agreement in place with Mexico. This became more serious in the summer when EK was conducting negotiations with few upscale Barcelona hotels for its cabin crew to stay in as well as for the EK Holidays division. With the open skies treaty being signed between UAE & Spain now, all options are available on the table for EK to pursue.

Currently QR only fly to Spain (Madrid) nonstop from the GCC and according to many, their flights are doing pretty ok. In Spain, MAD is the higher yielding market than BCN as its the political and financial capital of Spain hence there exists a bigger J & F class sized market segment here than in BCN. In Barcelona, the cargo potential for EK is huge as the city has a huge manufacturing and services industry which are booming.

In both Spanish cities, the main target market for EK would be transit traffic bound for the Far East (BKK/KUL/SIN), China, Japan, Australia and India. In the summer months, it shall definitely see high volume & high yielding traffic consisting of rich Arab families visiting their mansions on the Spanish peninsula.

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