Global daily news 10.06.2014

Big three Gulf airlines brush aside obstacles in pursuit of dominance

Middle Eastern carriers have grown despite concerns about staff and the environment
The blazing June heat meant that the only people walking outside in Doha were migrant workers, mainly from the Indian subcontinent, in hard hats and high-vis jackets, labouring to construct the ever-growing Qatari capital. Safely inside the air-conditioned Ritz Carlton, the International Air Transport Association was holding its annual meeting last week. On stage, it was gently pointed out to Willie Walsh, the boss of British Airways parent company IAG, that Qatar had built a whole new international airport in less time than he had spent vainly arguing for a new runway in London.
That's why an increasing number of Britons have been travelling via Middle Eastern hubs on their journeys worldwide – and also being tempted to linger en route, as new resorts and attractions are built. On first descent through the haze over apparently limitless empty sand baking under 50C heat, airline passengers might wonder what inhospitable terrain awaits, but the volumes of traffic continue to grow.
Three airlines now compete to pull Britons and millions of others travellers worldwide to their Middle Eastern operations: Emirates, the trailblazer and now elder statesman with its unparalleled fleet of giant aircraft in Dubai; Etihad, based in the neighbouring emirate of Abu Dhabi; and the ever more prominent Qatar Airways.
As major airlines and airports take root in the United Arab Emirates and Qatar, so do the attractions that are persuading millions of visitors to use their hubs. In places where little infrastructure existed decades ago, the abundant oil wealth is being converted into global status symbols such as the Burj Khalifa skyscraper in Dubai, alongside Abu Dhabi's planned Louvre and Guggenheim museums, and bespoke pitches by the sea for visiting Manchester City players. And in the latest sign of the region's surge to global prominence – and controversy – the 2022 football World Cup will see Qatar host an influx of vistors on a massive scale.
If few but Fifa can see why football should go to Qatar, the logic for aviation to hold its annual shindig there was clear. In a few short years, the three Gulf hubs have moved to centre stage in the global air transport network, where Heathrow once resided. The Gulf is at the crossroads of Europe and Asia, but also tapping into the growing importance of China and Africa. Their associated airlines have not only grown rapidly but tied up the bulk of orders for the new generation of aircraft that the industry hopes will be transformative for fuel efficiency and range: Emirates has an unparalleled fleet of Airbus A380s, the supersized double-decker planes, with 48 of the 132 flying worldwide and 92 still to come. Qatar Airways was the first to operate Boeing's troubled Dreamliner into Heathrow, and will be the first airline anywhere to fly Airbus's nearest equivalent, the A350, now in its final trials. Last month it started an all-business class flight between London and Doha.
Meanwhile, Etihad has picked up shareholdings in an abundance of airlines around the world. The UAE airline's stakes include holdings in Air Berlin and Aer Lingus, while it looks likely to make the maximum permitted 49% investment in the troubled Italian flag carrier, Alitalia. It is a strategy which divides opinion, as analysts question whether Etihad will ever be able to control these companies, but could potentially reap rewards should current restrictions on foreign ownership of airlines be relaxed in the future. In short, says one analyst, it is a long game only for investors with deep pockets and patience, which exactly matches the profile of the state-owned Gulf airlines.
The airlines have benefited from the same kind of blank canvas that allows architects to throw up buildings or, indeed, build a new airport in the Gulf, which can receive the newest planes and has the newest infrastructure. And also, at the more cutthroat end, not having the "legacy issues", as Etihad chief executive James Hogan has put it, of thousands of cabin crew on traditional contracts. The chief executive of Qatar Airways, the combative Akbar Al-Baker, has made no secret of his disregard for established rights. On an Iata stage this week, he described trade unions as "a pain in the ass". For the unions' part, the International Transport Workers' Federation submitted a case against Qatar in Geneva this week, accusing it of violating United Nations labour conventions, for restricting female cabin crew from marriage and allowing them to be sacked if pregnant. The ITF has documented Qatar Airways practices including curfews, surveillance and dismissal. Acting general secretary Steve Cotton said: "Qatar Airways already has an unenviable reputation for severe employment practices, even among industry professionals."
Responding to those allegations last year, when they were first aired, a Qatar Airways spokesman said the union was "making inaccurate allegations", adding: "Candidates applying to work are fully aware of the rules and regulations prior to joining and it is entirely their choice whether to join our five-star airline or not."
Meanwhile, Heathrow last month hurried to disassociate itself from outbursts by Al-Baker, who is a board member at the airport by virtue of the Qatar state's 20% stake in the business and had described west London residents as having "excessive" freedom to complain about aircraft noise. In Qatar, the new Hamad International airport was opened – at a substantially greater distance from Doha homes than Hounslow's are from Heathrow – in the nick of time for the aviation industry bash. Al-Baker denounced European contractors for the delay.
If national carriers always matter to governments, the Gulf takes it to another level. Qatar Airways claims to count for 11% of the state's GDP, and is an integral part of the country's economy, with the prime minister and the Emir of Qatar both in attendance for the official opening of the Iata conference.
Yet for all the lavish investment – Qatar served up lobster and a Kylie Minogue appearance to startled airline execs more used to a self-service buffet – the Middle East hubs have run up against an unexpected constraint: airspace. Qatar Airways has admitted its operations face regular delays as the region's airlines compete with military operations for slots in the air. Analysts don't believe it is an insoluble problem. But for now, there's a shred of hope for the likes of Heathrow and BA that the new global forces in aviation might face some capacity problems of their own.
ASSETS AND INFLUENCE
Qatar is a tiny state on the edge of Saudi Arabia with a projected population of just over 2 million, about 90% of whom are foreign migrant workers. With a GDP of $192bn (£114.3bn), its GDP per capita is by some estimates set to surpass Luxembourg as the highest in the world – with the extremes of wealth concentrated in the minority Qatari population.
More than $100bn of the state's oil and gas revenues have been spent acquiring assets around the world – notably in Britain, where they include the Shard, a 20% stake in Sainsbury's, the biggest single shareholding in Barclays, and Harrods. In Qatar itself, the nation has three signature assets beyond the airline:
The 2022 World Cup
The award of the tournament to a country with virtually no football pedigree or infrastructure stunned many – even before factoring in the intolerable heat of June, when the World Cup is traditionally played. The conditions endured by migrant labourers building the infrastructure have already caused an outcry. Now bribery claims could force a re-vote.
Al-Jazeera
The state-funded broadcaster is a crucial part of Qatar's soft power, a global network headquartered in Doha. It is credited with opening up debate in the Middle East, notably during the Arab spring, although its independence has been questioned.
Gas
While oil kickstarted Qatar, its future is being most prominently shaped by gas. Since 2006 it has been the world's biggest exporter of liquefied natural gas. Britain's Centrica alone signed a £4.4bn deal for Qatari LNG last year.




FROM ARABIAN BUSINESS:



***Global transport unions file complaint against Qatar Airways to UN body
By AVB Staff
  • Monday, 9 June 2014 10:43 AM
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Global union bodies the International Transport Workers’ Federation (ITF) and the International Trade Union Confederation (ITUC) have together filed a formal complaint against Qatar Airways at the International Labour Organisation (ILO), accusing the Gulf-based airline of violating the rights of its foreign workers.
An AFP report quoted union spokesperson Gabriel Mocho Rodriguez as saying: “We’re urging the ILO to make the recommendations necessary to bring the Qatar government into compliance with its international commitments as soon as possible and end the disgraceful measures.”
The ILO has constantly urged Qatar to change its labour practices, including removing restrictions on forming unions and striking.
According to the AFP report, Qatar Airways staff are forced to live in company compounds, under surveillance, with curfews. They are also banned from marrying during their first five years at the company and must obtain permission from the airline thereafter.
“Any infringement of the draconian regulations imposed on them is likely to result in sacking and deportation,” Rodriguez told AFP.
“Compared to the one-and-a-half million migrant workers in Qatar, there are a small number of aviation workers, around 20,000. They might have better salaries, they might have neat and tidy uniforms, but that does not mean they don’t suffer,” he added.
The International Labour Organisation is a United Nations body. It does not have the power to force countries to change its laws, but it can exert indirect pressure.
In a release, the ITF and ITUC confirmed the case had been filed with the ILO on Thursday June 5.
ITF acting general secretary Steve Cotton said: “Qatar Airways already has an unenviable reputation for severe employment practices, even among industry professionals, with allegations including harassment and restrictions on visitors and relationships. Its gender discrimination against female cabin crew is equally unacceptable.”
He continued: “We urge the ILO to act on our representation and make the recommendations necessary to bring the Qatar government into compliance with its international commitments as soon as possible.”
ITF president Paddy Crumlin said: "Qatar is on trial – over its national airline, over kafala, over the World Cup. The truth will out, and we're going to continue making sure it does. Change has to happen, and until it does the rulers of Qatar and Qatar Airways can be sure that we won't go away."


FROM TANKER OPERATOR:


***New seafarer pay agreement
Jun 06 2014

The ITF and JNG concluded negotiations for the creation of the new IBF Framework Agreement for seafarers in Indonesia this week.
The round of negotiations initially commenced in October 2013, when both parties met in St Petersburg, to exchange their list of demands for the negotiation.
These negotiations were particularly challenging this year, following the global shipping market’s depression, since the last agreement was negotiated in 2011. Both parties acknowledged the need to support the growth of the market, but also acknowledged the need to maintain sustainable and fair employment for the seafarers sailing on JNG vessels worldwide.
The talks concluded on Thursday with a mutually agreed Framework Agreement in place for the next three years. The main points were:
·         A salary increase of 1% in 2015, 2% in 2016 and 3.5% in 2017.
·         A 10% rebate for JNG members from the ITF Welfare Fund, with an additional 21Ž2 % based on an incentive system.
·         Downgrading of the Internationally Recognised Transit Corridor to an IBF Extended Risk Zone status, while maintaining all other risk areas previously agreed.
·         Changes to various contractual clauses.
·         Enhanced welfare support for seafarers.
Commenting on the two days of negotiations Dave Heindel, Chair of the ITF Seafarers’ Section, who oversaw the talks said:”Considerable progress has clearly been made from both parties over this round. The ITF has understood the challenges facing the JNG members in their ability to afford a pay increase, but it has been important to secure a pay increase for our members, to ensure a fair wage and conditions of employment. There have at times been differing views by both parties, but both have been able to put aside these differences to conclude the negotiations.’
JNG chairman Tsutomu Iizuka said:”The last eight months of IBF discussions have been tough. Both sides commenced the progress at different ends of the spectrum, wishing to best represent their respective members. There has been considerable movement from each side, which has been difficult at times and has only been possible due to the mutual respect between the parties to the IBF, gained over the past 10 years.’
Paddy Crumlin, ITF president said:”The negotiations were understandably difficult given the market conditions, but notwithstanding that the successful conclusion is a reflection of the maturity of social dialogue and engagement within this aspect of the shipping industry. In a truly international industry employing seafarers from virtually every nation, reaching a single standard of employment that is enforceable and supported by the social partners is an extraordinary achievement.


FROM SCOOP:

***ITF: 'World Cup warning well and truly sounded'
Saturday, 7 June 2014, 12:27 pm
Press Release: International Transport Workers' Federation
ITF: 'World Cup warning well and truly sounded'

Commenting on this week’s warning actions by workers of the LATAM airline across Latin America, ITF (International Transport Workers’ Federation) civil aviation secretary Gabriel Mocho said: “A World Cup warning has been well and truly sounded. This week’s actions are a push for fairness across the airline and a taste of what could happen in the World Cup if serious inequalities are not addressed.”
He continued: “Under the slogan ‘We are all LAN Peru’, LATAM workers have been expressing their support for their colleagues in Peru, where a strike next week has now become much more likely, following the management’s refusal to remedy dramatic inequalities of pay. Meanwhile in Argentina unions are struggling for a decent collective bargaining agreement.
“Last month the ITF network of LATAM unions warned the company that a failure to restart pay negotiations, stalled since late 2013, with Peruvian unions, could result in industrial action and cause flight delays or cancellations during the tournament.”
Mocho continued: “The core of the problem is the fact that LATAM is paying mechanics working for LAN Peru around half of those employed by them to do the same job in Argentina, Brazil and Chile. The 55,000 workers across the group want to see this injustice brought to an end.”
He concluded: “LATAM workers don’t want to strike during the World Cup but they have had enough. The ball is now in the company’s court. If they won’t listen to us maybe they’ll listen to the sound of their share price falling and the questions put by passengers about what’s going to happen during the tournament. Because if the company’s regional management continues to refuse to engage in direct talks with the unions, the workers feel they have little choice but to take industrial action.”
Regional aviation giant LATAM is the result of the merger in 2012 of LAN, the Chilean flag carrier, and TAM, Brazil’s biggest airline. The group operates in Argent