The Wall Street Journal-20080130-Busy Mideast Skies Test Airlines
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Busy Mideast Skies Test Airlines
Full Text (833 words)DUBAI, United Arab Emirates -- Rich Middle Eastern airlines are discovering that piles of cash can't buy quick fixes to problems threatening their rapid growth: crowded skies and scarce staff.
Fueled by soaring oil revenue and booming economies, Middle Eastern countries are building global airlines at a breakneck pace, with massive jetliner orders and aggressive expansion plans. But as the number of flights takes off and airlines find fewer qualified staff, some executives warn that ambitious growth plans may have to slow.
"Airspace capacity in the Gulf region is a real challenge and a potential roadblock to growth," said Tim Clark, president of Dubai's Emirates Airline, which has ordered as many as 195 new jetliners and plans to almost triple its current fleet of 111 planes by 2015.
The number of flights in Dubai and the six other sheikdoms of the United Arab Emirates grew almost 60% from 2001 through 2007, according to United Kingdom-based service provider Serco Group PLC, which manages the region's air traffic under contract. Traffic globally rose 37% over the same period, according to the United Nations' International Civil Aviation Organization.
With state-owned airlines such as Emirates, Abu Dhabi's Etihad Airways and Qatar Airways planning huge expansions, the region's airspace is set to get even more crowded. The International Air Transport Association, a global trade group, estimates that the number of international passengers in the Middle East will rise 30%, to 105 million a year by 2011.
Current infrastructure and air-traffic-control procedures "aren't capable of managing this," Majdi Sabri, IATA vice president for the Middle East and North Africa region, told Zawya Dow Jones.
The problem is compounded by the density of traffic around the Persian Gulf. Within a 300-mile range, Bahrain, Qatar and the U.A.E. have six major airports open or near completion.
And while political instability in the region hasn't impeded traffic growth, it does clog the skies. Big parts of Middle East airspace are either no-fly zones or places carriers avoid for safety reasons.
Congestion and stretched resources could hurt air safety, although a more probable result is ballooning delays. Global aviation standards require authorities to make planes wait on the ground or circle in the air if controllers are overburdened, and that is happening more frequently.
"The U.A.E. is already a complex air-traffic environment requiring skilled air-traffic management to safely handle the aircraft in the region's airspace," says Alan Brenchley, an air-navigation-service adviser at the U.A.E.'s General Civil Aviation Authority.
Governments are scrambling to accommodate all the traffic. The Gulf Cooperation Council's six countries are now working on 59 airport projects, which range from adding plane parking spots to building new terminals, with a combined investment of $17.8 billion, according to the Dubai-based research company Proleads.
Dubai alone is investing $82 billion in numerous civil-aviation and aerospace-industry projects, including what is slated to be the world's largest passenger and cargo hub. Once completed, Al Maktoum International Airport will have a capacity to handle 120 million passengers annually -- almost twice the passenger throughput of the world's top airports today, such as Chicago's O'Hare and London's Heathrow.
Paul Griffiths, chief executive of Dubai Airports, which manages Dubai's existing airport and the coming Al Maktoum airport, says more air-traffic-control capacity is needed "to make the new airport work."
Even if skies get unclogged, industry officials say, a shortage of personnel looms. Carriers world-wide are all chasing the same limited pool of qualified or certified aviation specialists, from air-traffic controllers to maintenance workers and safety inspectors. The Asia- Pacific region and the Middle East will need 150,000 additional employees to support new aircraft orders over the coming years, according to the Sydney-based Centre for Asia Pacific Aviation.
The number of staff at Abu Dhabi's Etihad, for example, has ballooned over the past two years to 5,500 from 2,200 employees.
"Finding staff is the biggest investment challenge facing Etihad today," Chief Executive James Hogan said.
Gulf carriers are responding with intensive recruitment programs, and many are setting up their own pilot-training plans.
Emirates Airline, whose staffing levels rose from slightly more than 18,000 in 2006 to almost 22,000 at the end of last year, is trying hard to meet the shortfall.
"Rapidly expanding airlines in Asia Pacific, India and the Arabian Gulf all face the same challenge in recruiting cockpit crew and aircraft engineers," an Emirates' spokeswoman said.
While foreign workers were once lured to the emirates by tax-free salaries, rapid career advancement and generous allowances, the appeal is waning. Living costs are rising, and because local currencies are pegged to the weakening U.S. dollar, their global buying-power has plunged.
Combined with fierce competition for staff, those factors are pushing up Gulf carriers' staff costs to unprecedented levels. The situation could ultimately force some players to cut back on growth.
Staffing is "the big storm on the radar, and some carriers, particularly those in the fast-growing emerging markets, are already feeling the turbulence by trimming expansion plans," said Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation.
