The Gulf's three established airlines - Gulf Air, Emirates and Qatar Airways - cautiously welcome new competition despite the fact that at least one of the start-ups, Etihad Airways, has potential for huge growth.

With its hub in Gulf Air's backyard - Abu Dhabi - its ownership by Gulf Air stake holder the Abu Dhabi government, and its close proximity to Emirates' stronghold Dubai, Etihad could become a major hindrance to both carriers. The concerted effort by Abu Dhabi to build a major hub operation at its international airport could affect Qatar and its airline's recently announced intention to build a major new international airport in Doha.

But the official line from the incumbents, for the time being at least, is that they welcome the new arrivals.

Gulf Air - the airline owned by Abu Dhabi, Bahrain and Oman and with a hub in each country - potentially has the most to lose because of Etihad. But chief executive James Hogan says he is not concerned about the new arrival: "It's business as usual for us - the Abu Dhabi government is fully committed to Gulf Air."

Hogan points out that there is already one local carrier in which a Gulf Air shareholder has a stake - Oman Air - and the two airlines co-operate rather than compete. "We'll support Etihad and where appropriate we will co-operate with them."

The number of UAE-designated carriers seeking route rights has doubled from two (Gulf Air and Emirates) to four (including Air Arabia and Etihad). Some see this as a stumbling block, particularly as two of the airlines - Gulf Air (including its all-economy arm Gulf Traveller) and Etihad - are operating from Abu Dhabi, but Hogan says: "Route rights are not an issue - many countries have several airlines competing for access," he says.

Gulf Traveller started operations in June with six one-class Boeing 767-300ERs transferred from Gulf Air on services from Abu Dhabi to Africa and the Indian subcontinent. Hogan says the airline has been a success, with load factors running at 90% and the division in profit. It is looking to add European destinations next year.

Emirates, owned by the Dubai government, has held cordial dialogue with Etihad. "Etihad is anxious to work with us in certain areas such as training," says Emirates president (airline) Tim Clark. He says his main concern about Etihad's arrival is that "the spoils of the UAE's aeropolitical negotiations are shared out evenly". He is confident that with its hub in the region's crown jewel, Dubai, the increase in the number of UAE carriers seeking rights will not affect Emirates' expansion plans. "Dubai is the UAE market that all the carriers want to come to. Those that want to come to Dubai will come to us and we'll do the deals with those countries for reciprocal rights," he says.

The creation of Qatar Airways has many similarities to that of Etihad. The country was a Gulf Air shareholder, and operated its own airline in parallel for several years until breaking away to throw its weight behind it own flag carrier. Qatar chief executive Akbar Al Baker says Etihad has "huge potential", but is not concerned by its arrival: "Competition is healthy for growth. We are in close contact about working with Etihad and providing assistance."

Source: Flight International