Could the recently established T2 terminal in Kuwait manage to attract international airlines once more?
With international carriers still grounded and Kuwait International Airport's Terminal 2 (T2) almost ready to roll out the red carpet, a pressing question lingers: Will a sparkling new terminal be enough to lure global airlines back? Or are there underlying commercial pitfalls that need to be addressed to boost Kuwait's allure and revitalize international air traffic?
Recent weeks have seen major European airlines like British Airways, Lufthansa, and KLM put the brakes on their Kuwait operations. This isn't just about a lack of terminal charm; it's primarily an economic issue, according to Al-Rai daily.
During a chat on "Kuwait Nights," Engineer Duaij Al-Otaibi, Acting Director General of the Directorate General of Civil Aviation (DGCA), expressed optimism over the return of some international carriers. He attributed the flight suspensions to internal airline economics, not necessarily issues within Kuwait.
"These companies operate based on profitability," Al-Otaibi stated. "Historically, regional carriers dominated passenger transport from Kuwait, making it less lucrative for major international airlines." He divulged that DGCA has been negotiating with various countries and airlines to resolve the problem, though acknowledged that the government can't mandate foreign airlines to operate in Kuwait.
Al-Otaibi also hinted at a demand surge once T2 opens. However, industry analysts call for a more measured approach.
Sami Al-Nisf, former chairman of Kuwait Airways, felt that expecting a horde of international carriers following T2's launch is wishful thinking. "The new terminal is merely the first step," Al-Nisf said. "Inviting international airlines requires widespread reforms, particularly in revitalizing Kuwait's commercial and tourism sectors."
Al-Nisf emphasized the importance of regional integration, particularly with neighboring Gulf countries, which continue to draw airlines due to their robust economies and open travel policies. Without stimulating passenger demand and improving the investment climate, Al-Nisf warned that the benefits of a new terminal might be minimal.
He also addressed the matter of fee structures at Kuwait Airport, saying they could be misaligned with airline operational realities. "It's not just about generating revenue through higher fees," Al-Nisf cautioned. "If airlines abandon Kuwait due to high 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 this sentiment. He noted that airlines are guided by profit margins, and currently, Kuwait doesn't shine as a regional transit hub. "Unless profitability can be guaranteed, airlines will not return," Arab said. High operating costs and intense competition from Gulf and Turkish carriers further erode Kuwait's competitive edge.
Arab also pointed out that an airline typically needs a flight occupancy rate of at least 65% to maintain operations. Threatening routes become economically untenable below this threshold.
Mohammed Al-Mutairi, Chairman of the Federation of Travel Agencies, concurred with this assessment. "Infrastructure changes alone won't alter airline behavior," Al-Mutairi said. "The real problem is that Kuwait has not offered a commercially compelling route." Faced with a global shortage of aircraft, airlines are prioritizing more lucrative destinations.
Al-Mutairi concluded that a blend of targeted incentives, economic reforms, and enhanced competitiveness will be necessary to bring international airlines back to Kuwait. Until these commercial fundamentals are addressed, the opening of T2-regardless of its modern design-may not be enough to reverse the trend.
As Kuwait tiptoes towards T2's grand unveiling, addressing the aforementioned challenges is crucial to ensure the airport becomes a magnet for international airlines. It's more than just about a stunning terminal; it's about creating an ecosystem that appeals to airlines: one that is financially viable, sustainable, operationally efficient, and strategically positioned.
- Engineer Duaij Al-Otaibi, despite optimism about international carriers returning, acknowledged that addressing underlying economic issues, such as revitalizing Kuwait's commercial and tourism sectors, is necessary to boost competitiveness and lure airlines back to Kuwait.
- Sami Al-Nisf emphasized that beyond the opening of the new terminal, stimulating passenger demand, improving the investment climate, and reintegrating with neighboring Gulf countries are critical to fostering a compelling commercial route and ultimately attracting international airlines.
- Thamer Arab highlighted the importance of guaranteeing profitability through addressing high operating costs and intense competition from Gulf and Turkish carriers, as well as ensuring flight occupancy rates are sufficient to maintain operations, in order to bring international airlines back to Kuwait.
