Will the recently unveiled T2 terminal in Kuwait sufficient to regain the interest of global airlines?
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Heading for a Takeoff: Navigating Kuwait's Journey to Attract Global Airlines Post-Terminal 2
With international airlines calling it quits on flights to Kuwait, and the near completion of the sleek Terminal 2 (T2) at Kuwait International Airport, it's time to weigh in: Will the shiny new terminal shore up international carriers' interest, or are there deeper, economic hurdles lurking beneath? Here's what insightful chatter reveals about Kuwait's quest to rekindle global airlines' affection.
Recent curveballs from big European players like British Airways, Lufthansa, and KLM have summed up a broader complication – airlines are pulling out due to economic troubles, as reported by Al-Rai daily. In a candid interview on "Kuwait Nights," on Kuwait TV, Acting Director General of the Directorate General of Civil Aviation (DGCA), Eng. Duaij Al-Otaibi, remains hopeful about the prospect of big international airlines' revival. He maintains that these flight suspensions stem from the airlines' internal economic decisions, not necessarily from factors within Kuwait.
"These corporations run on commercial profitability," Al-Otaibi explained. "Historically, regional carriers dominated the passenger transport scene in Kuwait, leaving little scope for major international players. But if conditions improve, there's no reason they won't return."
He further shared that DGCA has been engaging with various countries and airlines to tackle this issue, though acknowledged the government lacks the power to coerce airlines into operating in Kuwait.
However, industry experts are urging a more grounded perspective.
Sami Al-Nisf, the former chairman of Kuwait Airways, debunks the idea of a flood of international airlines following the T2 inauguration. "The new terminal is merely a stepping stone," he stated. "Yes, it's vital, but re-attracting international airlines demands broader reforms, particularly in driving growth in Kuwait's commercial and tourism sectors."
Al-Nisf underscored the importance of stronger regional integration, especially with Gulf countries that continue to attract airlines due to their thriving economies and lenient travel policies. He warned that without bolstering passenger demand and improving the investment climate, the benefits of T2 could be limited.
He also criticized current fee structures at Kuwait Airport, cautioning that these may not align with airline operational realities. "Optimizing revenue is crucial, but airlines will abandon ship if costs become prohibitive," he warned. In his view, an empty terminal from high costs would be the real tragedy.
Thamer Arab, another former chairman of Wataniya Airways, echoed this sentiment. He pointed out that international airlines prioritize profit, and that Kuwait currently lacks the lure of a regional transit hub. "Unless profitability can be guaranteed, airlines won't return," he said. He also highlighted that high operating costs and fierce competition from Gulf and Turkish carriers cap Kuwait's competitiveness.
Arab also mentioned that an airline generally requires a minimum flight occupancy rate of 65% to maintain operations. Below this threshold, routes become financially impractical.
Mohammed Al-Mutairi, Chairman of the Federation of Travel Agencies, agreed that infrastructure improvements won't necessarily alter airline behavior. "The real issue is that Kuwait hasn't been a commercially attractive route," he argued. With the air travel industry in high demand, airlines are prioritizing more profitable destinations.
Al-Mutairi concluded that an blend of targeted incentives, economic reforms, and enhanced competitiveness would be necessary to bring international airlines back to Kuwait. Without tackling these industrial foundations, the opening of T2, no matter how swanky, may not reverse the trend.
In gist, sprucing up Kuwait's aviation sector demands a holistic approach, addressing infrastructure delays, operational setbacks, negative perceptions, sluggish passenger volume, fierce competition, underperforming national carriers, and the ever-imperative need for sustainable innovation and a conducive investment climate.
- Despite the completion of Terminal 2 at Kuwait International Airport, industry experts like Sami Al-Nisf believe that attracting global airlines requires broader reforms beyond the infrastructure, particularly driving growth in Kuwait's commercial and tourism sectors.
- Engaging with various countries and airlines is a strategy employed by the Directorate General of Civil Aviation (DGCA) to address the suspension of flights by international carriers, but Acting Director General Eng. Duaij Al-Otaibi acknowledges that the government lacks the power to coerce airlines into operating in Kuwait.
- Thamer Arab, a former chairman of Wataniya Airways, emphasizes that for international airlines to return, the financial hurdles must be addressed, such as optimizing revenue and ensuring costs do not become prohibitive.
- Mohammed Al-Mutairi, Chairman of the Federation of Travel Agencies, argues that infrastructure improvements alone will not change airline behavior, and that a blend of targeted incentives, economic reforms, and enhanced competitiveness is necessary to bring international airlines back to Kuwait.
- Sustained innovation and a conducive investment climate are essential aspects that Kuwait must address to attract international airlines, as Kuwait currently lacks the lure of a regional transit hub due to high operating costs and fierce competition from Gulf and Turkish carriers.
- Stronger regional integration with Gulf countries, which continue to attract airlines due to their thriving economies and lenient travel policies, is crucial for enhancing Kuwait's competitiveness in the aerospace, finance, transportation, lifestyle, business, and travel sectors.
