Can the recently opened T2 terminal in Kuwait attract international airlines once again?
In the face of major European carriers like British Airways, Lufthansa, and KLM halting their operations in Kuwait, and the impending completion of Terminal 2 (T2) at Kuwait International Airport, questions abound. Can the glamour of a modern terminal single-handedly entice global airlines back to the Middle Eastern nation, or are there deeper, commercial hurdles that need to be tackled to invigorate Kuwait's appeal and revive international air traffic?
Recent months have seen a plethora of economic concerns underpinning the airlines' decisions to call it quits in Kuwait. According to Al-Rai daily, airlines have pulled out due to factors that extend beyond mere infrastructure issues.
Eng. Duaij Al-Otaibi, Acting Director General of the Directorate General of Civil Aviation (DGCA), expressed cautious optimism regarding the return of international airlines. During a recent interview on Kuwait TV's "Kuwait Nights," he stated that the flight suspensions were motivated by the airlines' commercial interests, not necessarily by conditions within Kuwait itself.
"Airlines operate based on their commercial viability," explained Al-Otaibi. In the past, regional carriers had dominated passenger traffic from Kuwait, disincentivizing international giants from venturing into the market. However, under the right conditions, global airlines might reconsider their decision to leave.
Al-Otaibi emphasized that DGCA has actively engaged with various countries and airlines in an attempt to ameliorate the situation, acknowledging, however, that the government cannot force airlines to operate in Kuwait. Once T2 opens, he confidently predicted that "they will need to return...The demand will be there."
However, industry experts call for a more measured stance.
Sami Al-Nisf, former chairman of Kuwait Airways, deemed the anticipation of a swarm of international airlines post-T2 opening unrealistic. "The new terminal is merely a stepping stone," Al-Nisf explained. "Beyond infrastructural improvements, the revitalization of Kuwait's commercial and tourism sectors is key to rekindling international airlines' interest."
Al-Nisf emphasized the necessity for stronger regional integration, specifically with Gulf countries that continue to prosper and attract airlines due to their robust economies and laissez-faire travel policies. He warned that without a concerted effort to boost passenger demand and improve the investment climate, the benefits of a modern terminal could go unrealized.
Addressing current fee structures at Kuwait Airport is another concern in Al-Nisf's view. "It's not simply about generating revenue through higher fees," he cautioned. "If airlines pull out due to exorbitant costs, we'll end up with an empty terminal; a case of the operation succeeding, but the patient dying."
Thamer Arab, former chairman of Wataniya Airways, echoed Al-Nisf's sentiments. He highlighted that international airlines prioritize profitability and suggested that Kuwait currently lacks the allure of a regional transit hub. "For airlines to return, profitability must be guaranteed," Arab asserted, adding that high operating costs and stiff competition from Gulf and Turkish carriers stain Kuwait's competitive edge.
Arab also pointed out that an airline typically requires a flight occupancy rate of at least 65% to maintain operations. Below that threshold, routes become financially infeasible.
Mohammed Al-Mutairi, Chairman of the Federation of Travel Agencies, concurred that infrastructure upgrades alone would not alter airline behavior. "The terminal itself is not the issue," Al-Mutairi said. "The real problem is that Kuwait has not been an appealing commercial route." With a global dearth of aircraft, airlines are prioritizing more profitable destinations, Al-Mutairi explained.
In conclusion, Al-Mutairi posited that a blend of targeted incentives, economic reforms, and enhanced competitiveness would be required to lure international airlines back to Kuwait. Revitalizing the commercial and tourism sectors, competitive pricing and incentives, effective marketing strategies, operational efficiency, and regulatory support are all paramount to reversing the current trend.
Insights from Enrichment Data
- To attract international airlines, it is crucial to maintain excellent infrastructure and service quality at the airport. In addition, smaller operational modifications like efficient handling of flights, baggage, and passengers are necessary for a smooth experience.
- Offering competitive pricing and incentives to airlines can entice them to return. This encompasses discounts on landing fees, fuel prices, and other operational expenses.
- A strong marketing and promotion strategy is vital to draw international attention to the new terminal and its benefits. Collaboration with airlines, tourism boards, and other stakeholders can help highlight the advantages of flying through Kuwait.
- Eliminating regulatory and bureaucratic delays and creating a supportive regulatory environment are essential for attracting airlines.
- Understanding the market demand is crucial to ensure that flights through Kuwait are profitable and viable for airlines. Strategizing airline routes based on passenger traffic is an effective approach towards catering to the market demand.
- Competing effectively with other regional hubs like Dubai and Doha necessitates offering unique services or routes that differentiate Kuwait from its competitors.
- Achieving financial stability of the national carrier, Kuwait Airways, is key to enhancing the country's aviation sector's reputation and attracting foreign airlines.
[1] Kuwait Airport Terminals: A Comprehensive Overview, Arab Times (https://www.arabtimesonline.com/news/kuwait-airport-terminals-comprehensive-overview/)
[2] Root Causes of Kuwait Airways’ Losses,Arab Times (https://www.arabtimesonline.com/business/root-causes-kuwait-airways%E2%80%99-losses/)
[3] Kuwait Airport Operations and Maintenance Tender Cancelled, Kuwait Times (https://www.kuwaittimes.net/2019/12/15/kuwait-airport-operations-and-maintenance-tender-cancelled/)
- To entice international airlines to operate in Kuwait, beyond investing in a modern terminal, it's essential to optimize the airport's infrastructure and improve its operational efficiency, including managing flights, baggage, and passengers effectively.
- Furthermore, offering competitive pricing and incentives to airlines—such as discounts on landing fees, fuel prices, and other operational expenses—can make Kuwait a more attractive destination for international carriers.
- Lastly, a comprehensive marketing and promotion strategy should be developed and implemented to raise awareness about the benefits of flying through Kuwait and strengthening partnerships with airlines, tourism boards, and other stakeholders is crucial for creating a positive image of the new terminal.
