Middle Eastern carriers agree to codeshare and co-ordinate schedules in effort to gain competitive edge

Six Middle Eastern carriers planning a multilateral alliance – aimed at schedules co-ordination and codesharing – have named their group Arabesk and aim to launch it early next year.

Secretary general of the Arab Air Carriers Organisation (AACO) Abdul Wahab Teffaha said on the sidelines of last week's IATA annual general meeting in Tokyo that the six airlines plan to "sign it off" at a meeting on 13 July. "The first co-ordinated schedules will be put in place at the latest in April 2006," he says.

Plans for such a grouping were unveiled in October last year, when five AACO member airlines said they would be initial participants in what they dubbed a "virtual alliance". Teffaha says there are now six airlines involved in the creation of Arabesk, namely Egyptair, Gulf Air, Middle East Airlines, Oman Air, Royal Jordanian Airlines and Saudi Arabian Airlines. Sabre Airline Solutions is heavily involved in the project through the use of its network analysis applications and other products. "There has always been a collective wisdom that close competitors in a region cannot co-operate effectively because they compete for the same passengers," says Sabre Airline Solutions senior vice-president consulting Nejib Ben-Khedher. "Arabesk challenges this perception by ensuring that the co-operation occurs on schedules, while allowing free and open competition on pricing among the members for the pool of passengers."

Teffaha says Arabesk "will strengthen the competitiveness of our members as a whole and provide better connectivity for travellers throughout the world and within the region".

He adds: "While many of the airlines involved in this alliance were competing with each other, larger, more powerful airlines and alliances were being established and set to grow. Now, these airlines intend to co-operate and compete directly against larger carriers and alliances with a combined network, while still competing with each other for passengers, based on a competitive pricing policy."

Teffaha also says two other AACO member airlines have expressed interest in becoming Arabesk partners, namely Tunisair and Yemenia. "By the time we launch the project, it may be eight members," he reveals.

The initial goal of the alliance is to optimise the schedules of each airline, which will help lead to codesharing, he explains, adding that it will also help to boost operations in underserved markets. "We don't want to minimise competition, but our task is to maximise the competitive advantage of Arab airlines," he says.


Source: Flight International