Dubai

For UK businesses dipping a toe in foreign waters, the Middle East is proving to be a hot prospect – and airlines are cooperating with a host of recent route launches, says Colin Ellson.

FOR UK companies looking to expand their portfolio of overseas market, 2008 began with a call to arms from Lord Digby Jones, the minister for trade and investment.

Speaking at an emerging markets forum in London, he said: “There are thousands of companies in Britain who have the ability and experience to export to high growth markets but are not aware of the commercial opportunities. We want to help.”

Significantly for the Middle East, the minister singled out Qatar, Bahrain, Saudi Arabia and the United Arab Emirates as particularly worthy of UK plc’s attention. To these could be added any number of smaller countries in the region looking for goods, services and expertise as they switch from reliance on oil to mixed economies. Flying to them is increasingly easy as the airlines see their own commercial opportunities, getting them off the ground, by inaugurating new routes, increasing frequencies and enhancing their products.

Oman Air, for example, launched flights from London Gatwick to Muscat at the end of November last year, which coincided with Silverjet becoming the first all-business-class carrier to fly a non-transatlantic route when it took off from London Luton for Dubai.

bmi is also spreading its Middle East wings, adding services from Heathrow to Dammam, Saudi Arabia, on March 1, followed by the Israeli financial centre of Tel Aviv 12 days later.

Business travellers from that airport are also enjoying the trial of El Al’s Early Check-in at Home service. This allows them to complete the security check from their current base, send luggage to the terminal, and turn up 55 minutes before departure, rather than two-and- a-half hours beforehand. The additional cost is from £28.

Meanwhile, flight frequencies are being increased on the basis of supply and demand. Gulf Air has introduced a third daily flight from Heathrow to Bahrain; Qatar Airways is to introduce a fourth flight from Heathrow to Doha from March 30; and on the same day, Middle East Airlines is increasing flights from five a week to daily between Heathrow and Beirut, as well as underlining renewed confidence in Lebanon by ordering four Airbus A330s and six A320s.

Not yet in Emirates league but a start: the Dubai-based carrier set an aviation record at the Dubai Air Show last November when it ordered 143 aircraft, worth $34.9 billion.              

The Middle East has a lot of money to spend, an incentive for your company to dip its toe in the water. For further information on emerging markets, contact UK Trade & Investment at ukti.webmaster@uktradeinvest.gov.uk

Abu Dhabi
The capital of the UAE, Abu Dhabi is as different from the second emirate of Dubai as chalk and cheese, its economy heavily dependent on hydrocarbons, while its less well-endowed neighbour is branching out across a raft of sectors. Together, they represent the UK’s largest market in the Middle East, taking more than £5.5 billion-worth of British goods a year.

Although it has 10% of the world’s oil reserves, Abu Dhabi is hedging its bets and venturing into tourism, and plans to stage only the second Formula One Grand Prix in the Middle East from 2009

British Airways flies daily to Abu Dhabi from London Heathrow, Etihad 19 times a week, plus daily services from Manchester. Alternatively, Gulf Air operates from Heathrow via Bahrain, and Lufthansa from Frankfurt.            

Bahrain
While Abu Dhabi waits in the pits, Bahrain hosted the first grand prix in the Middle East in 2004. This has proved to be a high-revving motor for the tourism sector, with an annual average growth rate of some 15%. 

Less dependant on oil than most Gulf States, the island kingdom has one of the world’s largest aluminium smelting plants, important duty-free zones, and a growing manufacturing sector.

UK exports to Bahrain were worth £263.6 million in 2006, and UK Trade & Investment has identified further potential in financial services, education and training, construction and motor sport.

Gulf Air flies to its main base of Bahrain three times a day from Heathrow, from where BA has a daily flight. Departures from continental Europe include Lufthansa out of Frankfurt, and KLM from Amsterdam Schiphol.

Dubai
The emirate is the star of the region, its phenomenal rate of growth, its ambitious building projects, exclusive hotels and enviable financial acumen making it the fastest-growing city in the world. While tourism sets new records every year, a measure of Dubai’s entrepreneurial flair is that it conducts 85% of the UAE’s trade with the UK.

Emirates flies to Dubai five times a day from Heathrow, three from Gatwick, twice a day from Birmingham and Manchester, and daily from both Glasgow and Newcastle. Also from Heathrow, BA operates twice daily, Virgin and Royal Brunei daily, and Biman Bangladesh five times a week, while all-business-class airline Silverjet has daily departures from London Luton. One-stop options from the UK include Gulf Air via Bahrain, Qatar Airways via Doha, and Etihad via Abu Dhabi. In addition, there are direct flights with Lufthansa, KLM and Air France from their European hubs, and. Aer Lingus offers four services a week from Dublin. 

Israel
Forget, if you will for a moment, Israel’s pivotal role in the stalled Middle East peace process. As a UK export market, the affluent cradle of  religion is a remarkable success story, ranking third-largest in the Middle East, with two-way trade amounting to £2.27 billion in 2006. Israel’s economy is similar to those of Western Europe, and the government is pledged to investment in infrastructure and privatisation. The venture capital/hi-tech sector is now ranked 10th in the world, and with a growth rate of over 5% in recent years forecast to continue, there are good opportunities for UK companies in a range of areas, particularly healthcare and science and technology.

BA flies to Tel Aviv twice daily from Heathrow, El Al has the same frequency, except for single flights on Friday and Saturday. Additional flights operate from Stansted airport and there’s a new Monday morning flight from Heathrow airport.

bmi will launch a daily service on the route from March 13. Other options include Air France-KLM from Paris CDG, KLM from Schiphol, and Lufthansa out of Frankfurt. 

Jordan
Scenically grand and a magnet for tourists, Jordan has scant natural resources, limited agricultural land, no oil and little water. Surprisingly, the 5.5 million population enjoys one of the highest per capita disposable incomes in the sub region, due to the kingdom’s ability to maintain social and political stability, and to remittances from Jordanians working abroad. The UK exported £161 million-worth of goods in 2005, and there is potential in everything from machinery, pharmaceuticals to construction.

BA, Royal Jordanian and bmi serve the capital of Amman daily from Heathrow. Alternative routeings are Lufthansa from Frankfurt, KLM departing Amsterdam, and Air France from Paris CDG.

Kuwait
Oil from vast reserves lubricates the Kuwaiti economy, to the extent that it accounts for 95% of government revenues. With oil markets at their current level, Kuwait is on a roll. Its confidence is high since the removal of the Iraqi regime across the border, and private investment at an all-time high. UK exports to our third-largest trading partner in the Gulf were worth £437 million in 2005, and in an economy heavily dependant on imports, the Kuwaiti government is looking for more overseas participation in oil and gas, major infrastructure projects, financial services, and the environment. The country is also a natural gateway to the re-emerging Iraqi market.      

Kuwait Airways and BA fly to Kuwait daily non-stop from Heathrow, Gulf Air via Bahrain, with links from the continent including Lufthansa from Frankfurt, and KLM from Schiphol.

Lebanon
How do you solve a problem like Lebanon? Following the end of the long-running civil war in 1989, the capital of Beirut was rebuilt and by 1997 was well on the way to regaining its title as the Paris of the Middle East. Then came renewed conflict with Israel in summer 2006, causing widespread damage.

The Lebanese are, however, resilient, and the government is committed to a rebuilding programme so the private sector can lead the recovery of the economy and the country’s renaissance as a regional hub for trade, services and tourism.

As the sixth-largest exporter to Lebanon, with exports worth £212 million in 2005, the UK has a major role to play in the reconstruction, from water treatment to aviation. .

BA and bmi serve Beirut daily from Heathrow, Middle East Airlines five times a week, reverting to a daily summer operation from March 30. Services from the continent include Lufthansa from Frankfurt, KLM from Schiphol, and Air France from Paris CDG. 

Oman
The oldest independent state in the Arab world, Oman is also one of the more traditional. For many years isolated from the rest of the world, in recent years it has taken its place on the world stage as it moves towards democracy. The economy relies on oil for most of its revenue, but diversification is focusing on natural gas, port development, IT, fisheries and manufacturing, while tourism, centred on the fairy-tale capital of Muscat, is expanding rapidly.

In 2006, UK exports to the sultanate amounted to £376 million. The current shopping list well worth exploring includes transport equipment, telecoms, and chemicals.

From Heathrow, Gulf Air flies twice daily to Muscat, BA daily, with Oman Air offering six flights a week from Gatwick. Continental connections include Lufthansa from Frankfurt and KLM from Schiphol.

Qatar
One of the wealthiest countries on the planet, Qatar is probably best known as the home of the controversial Al-Jazeera satellite TV station, which has an estimated worldwide audience of 150 million. The economy is rooted in oil and gas, but attracting tourism is a priority, with major investment in airports, roads, hotels and museums. While the fossil fuel sector provides potential for UK involvement, the future infrastructure and development projects offer exciting prospects – forecast to boost British exports substantially from the £489 million recorded in 2006.

Qatar Airways will launch a fourth daily frequency from Heathrow to the Qatari capital of Doha on March 30. It also flies daily from Gatwick and Manchester. Also from Heathrow, BA offers a daily flight, and Gulf Air a double-daily service via Bahrain. Alternative routeings are with KLM from Schiphol, and Lufthansa from Frankfurt and Munich.      

Saudi Arabia
The kingdom of Saudi Arabia has it all. Its landmass is bigger than Western Europe, it is the Arab world’s largest economy, and it has the most extensive reserves of oil and gas on earth. The good news in this hitherto difficult business environment is that since joining the World Trade Organisation in 2005, the country has been committed to further liberalisation of its trading regime and economic reform. 

With the market growing apace, there are limitless opportunities in every sector in the UK’s largest trading partner in the Middle East, which imported £1.6 billion-worth of British goods in 2006.

Saudi Arabian Airlines flies direct to Riyadh from Heathrow four times a week, and to Jeddah daily, with flights to Dammam via both. Bmi serves each centre from Heathrow three times a week, and will operate the same frequency on non-stop flights to Dammam from March 1. BA serves the city daily from Heathrow. In addition, Air France and Lufthansa operate from Paris CDG and Frankfurt respectively to Riyadh and Jeddah, KLM to Riyadh from Schiphol.

Syria
The socialist state on the Eastern Mediterranean is in the process of a slow-burn transformation from a state-orientated system to a market economy. Nevertheless, this remains a challenging market, although the spoils of success can be considerable in a country which takes £89 million-worth of British exports every year.

The situation has been easing, however, since the signing of the EU/Syria Association Agreement in 2004. In return for financial and technical support to modernise its economy, Syria will gradually remove import tariffs on European goods.

Pick up the gauntlet and there are opportunities in banking and financial services, education, healthcare, oil and gas, railways, tourism and leisure.

BA and bmi serve the Syrian capital of Damascus daily from London Heathrow, the second city of Aleppo three times a week. Syrian Arab Airlines flies to the capital from Heathrow thrice-weekly, and there are flights from Schiphol with KLM, and Air France from Paris CDG.

Yemen
Most economic indicators classify Yemen as a developing country. But statistics do not give an adequate picture of a nation of extremes, where wealth and poverty, modernity and tradition exist cheek by jowl. Crude oil accounts for 82% of exports, and while production is in decline, largely unexploited natural gas reserves go some way to compensating for the loss of revenue. Agriculture and remittances sent home by Yemenis working overseas are also important to the economy.

Britain exported goods valued at £62 million in 2006, and the significant flow of development aid into Yemen means further potential in pharmaceuticals, food processing, oil and gas machinery and banking.  

Yemenia Yemen Airways flies from Heathrow to the capital of Sana’a twice a week, and Lufthansa has regular services from Frankfurt. Otherwise, there are good connections from a number of the region’s major airports.

Alternatively, passengers from London to Sana’a with Yemenia can travel on to destinations across Yemen – highly recommended, as the roads are often rudimentary and roamed by unscrupulous opportunists. And Middle East Airlines - the great survivor, maintaining its integrity through some difficult times - has a spider web of routes spinning out from Beirut to Abu Dhabi, Amman, Dammam, Doha, Dubai, Jeddah, Kuwait, and Riyadh.

Meanwhile, the local aviation scene has been changing with an influx of low-cost operators, a sector slow off the mark in the Middle Eat but adopting the budget models pioneered in the US and Europe and catching up fast on the benefits of low frills and high volumes.

One of the first off the starting blocks was Sharjah-based Air Arabia, which mirrors its more mature budget brethren and flies a network covering Syria, Jordan, Lebanon, Bahrain, Qatar, Kuwait, Oman, Saudi Arabia and Yemen. Equally keen to learn is Kuwait-based, low-fare Jazeera Airways, which again serves the major Arab capitals in the north of the Middle East, plus Bahrain, Dubai, and Muscat and Salalah in Oman. In fact it is well abreast of its seniors, with plans to allow mobile phones in flight from 2009.

Saudi Arabia has two low-cost airlines in Nas Air, the first in the kingdom, serving 20 regional destinations from Riyadh, and Sama, which flies from Dammam on a dozen domestic routes, has launched flights to Lebanon and Syria, and plans to expand its international network.  

This year, Middle Eastern budget carriers are expected to take off in increasing numbers, with Bahrain Air and Kang Pacific Airways both announcing they will start operations early in 2008. Bahrain Air says it will serve Amman, Beirut and Damascus, together with Doha, Dubai, Kuwait and Saan’a; while Fujairah-based Kang - promising fares pitched between low-cost and premium - will operate to East Midlands airport in the UK, points around the Gulf, and further afield in the region.

Inevitably, as in Europe and the US, there has already been a casualty of sorts in the Middle East’s burgeoning low-cost sector.

Beirut’s Menajet, launched in 2004 with an affordable air travel remit, has since turned itself into mainly a charter carrier, flying to destinations around the Mediterranean. Don’t ask which – the schedule is nothing if not fluid, changing shape like a mirage in the desert.

THE CARBON COST  
The table below shows the distance covered by a return flight between London and the destination, together with the approximate carbon emissions and the cost of offsetting it with The CarbonNeutral Company. See: www.carbonneutral.com