Leveraging On Opportunities Mohammed Mehdi Dec 08


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China Aviation Outlook Conference, Beijing, Dec 08

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Leveraging On Opportunities Mohammed Mehdi Dec 08

  1. 1. Leveraging On Opportunities Arising From The Development Of New Middle East-China Air Routes Syed Mohammed Mehdi Director of Marketing and Promotion Civil Aviation Affairs Kingdom of Bahrain
  2. 2. Introduction <ul><li>Assessing the growth potential in the Middle East-China market </li></ul><ul><li>How to capture China Market from the perspective Middle Eastern Airport </li></ul><ul><li>Learning how to serve untapped markets </li></ul><ul><li>Developing the optimal entry strategy for the Middle eastern market </li></ul>
  3. 3. Where is Kingdom of Bahrain? KUWAIT OMAN U.A.E SAUDI ARABIA QATAR BAHRAIN IRAN Pakistan India IRAQ YEMEN P.R.CHINA
  4. 4. Location of Bahrain Existing Causeway Planned Causeway Completion 2012 Saudi Arabia Qatar BAHRAIN
  5. 5. What Happens in Bahrain and Around? <ul><li>Bahrain has over 350 banking, financial and insurance houses serving the Middle East and wider region </li></ul><ul><li>50% of Saudi Arabian Business is based in the Eastern Province. The major industry in the province is Oil and Petrochemicals. Other major industries supporting the Oil and Petrochemical industries are construction, power plant, food processing, etc. </li></ul><ul><li>Over 100 projects have been signed off with a total project value about US $200 billion. Some of the major projects are listed below: </li></ul><ul><ul><li>US$ 16 billion Petrochemicals at Ras Tanura </li></ul></ul><ul><ul><li>US$ 25 billion mineral processing </li></ul></ul><ul><ul><li>US$ 6 billion heavy oil refinery </li></ul></ul><ul><ul><li>US$ 3 water and electricity project </li></ul></ul>BAHRAIN Government Services 11% Financial Corporations 22% Crude Petroleum and Natural Gas 22% Transport and Communications 6% Trade 9% Real Estate and Business Activities 7% Manufacturing 12% Other 11% Bahrain Economic Structure - 2005
  6. 6. Middle East – China Trade <ul><li>In 1991, total trade between China and Arab countries was $2.42 billion. grown twentyfold to $51.3 billion in 2005. </li></ul><ul><li>The Chinese government has targeted US$100 billion in total trade with the Middle East by 2010 -- up from US$51.3 billion in 2005. </li></ul>
  7. 7. Trade Volumes between Middle East and China
  8. 8. Middle East China Trade <ul><li>Assessing the growth potential in the Middle East-China market </li></ul><ul><ul><li>Growth in the Middle East region </li></ul></ul><ul><ul><ul><li>Trade with the World </li></ul></ul></ul><ul><ul><ul><li>Trade with China </li></ul></ul></ul><ul><li>The Middle East currently provides over 45 per­cent of China’s total oil imports. </li></ul><ul><li>By 2015, 70 per­cent of China’s oil imports is expected to come from the region </li></ul><ul><li>Saudi Arabia, its top oil supplier </li></ul><ul><ul><ul><li>. </li></ul></ul></ul>
  9. 9. Middle East – China Trade <ul><li>Saudi Arabia provides about 17 percent of China’s oil imports </li></ul><ul><li>China National Petrochemical Corporation (SINOPEC) & Arabian American Oil Company (ARAMCO), </li></ul><ul><ul><li>Invested $300 million to explore the Ghawar natural gas field in the Rub al-Khali desert in Saudi Arabia </li></ul></ul><ul><li>ARAMCO </li></ul><ul><ul><li>Investment $3.5 billion refinery expansion project in China’s Fujian province </li></ul></ul><ul><ul><li>$1.2 billion refinery in Qingdao with SINOPEC . </li></ul></ul>
  10. 10. Middle East – China Market <ul><li>Middle East – China passenger traffic has been growing at 50% over past 3 years </li></ul><ul><li>Destinations Served from the Middle East </li></ul><ul><ul><li>Beijing </li></ul></ul><ul><ul><li>Shanghai </li></ul></ul><ul><ul><li>Guangzhou </li></ul></ul>
  11. 11. Middle East Market <ul><li>Major Markets from Middle East – P.R.China – Sept 07 – Aug 08 </li></ul>* Bahrain – Service to PVG Started in June 08 by GF * Source MIDT and BSP Data
  12. 12. Its not all doom and gloom 15 year trend 25 year trend
  13. 13. The Future BOEING CMO
  14. 14. Where to go? <ul><li>Untapped Markets </li></ul>
  15. 15. Questions to be asked? <ul><li>How to capture China Market from the perspective Middle Eastern Airport ? </li></ul><ul><ul><li>In 2006, 34.52 million Chinese tourists travelled abroad </li></ul></ul><ul><li>Ask these questions? </li></ul><ul><ul><li>Why Middle East??? </li></ul></ul><ul><ul><li>Why from China?? </li></ul></ul><ul><ul><li>Arab and Chinese travel patterns and buying habits </li></ul></ul><ul><ul><li>Price sensitivity of the market </li></ul></ul><ul><ul><li>Market sizes </li></ul></ul>
  16. 16. High Yield Market
  17. 17. How to capture China Market from the perspective Middle Eastern Airport <ul><li>START SERVICE to other Major destinations in the Middle East before Middle Eastern carriers capture the market </li></ul><ul><li>Where From </li></ul><ul><ul><li>Beijing </li></ul></ul><ul><ul><li>Shanghai </li></ul></ul><ul><ul><li>Guangzhou </li></ul></ul><ul><li>Offer combined product to suit both markets – may be against the branding </li></ul>
  18. 18. Learning How to Serve Untapped Markets <ul><li>Extend existing services from points in the Middle East </li></ul><ul><li>Price sensitivity of the market in the Middle East </li></ul><ul><li>Be aware of capacity dumping </li></ul><ul><ul><li>Aircraft on order </li></ul></ul><ul><ul><ul><li>Emirates </li></ul></ul></ul><ul><ul><ul><li>Etihad </li></ul></ul></ul><ul><ul><ul><li>Qatar </li></ul></ul></ul>FROM DXB - CHINA
  19. 19. Developing the optimal entry strategy for the Middle Eastern market <ul><li>Not all markets are big in the region </li></ul><ul><ul><li>Collective revenue/tag/extension </li></ul></ul><ul><ul><li>Code share </li></ul></ul><ul><ul><li>Interline </li></ul></ul><ul><li>Match competitors frequency </li></ul><ul><li>Offer mixed product </li></ul><ul><li>Negotiate discounts on charges </li></ul>
  20. 20. <ul><li>Remember a few things while planning your operations </li></ul><ul><ul><li>Location of Middle East – Center of the world </li></ul></ul><ul><ul><li>Middle East market is HIGH yield </li></ul></ul><ul><ul><li>Your passengers are both Arabs/Arabian residents and Chinese </li></ul></ul><ul><ul><li>Your passengers are business men – dealing with Oil, Petrochemicals, Banking and Finance – Traders and purchasers – Overseas Chinese Workers </li></ul></ul><ul><ul><li>Competition is increasing and be ahead of it. </li></ul></ul>
  21. 21. <ul><li>THANK YOU </li></ul><ul><li>Mohammed Mehdi </li></ul><ul><li>Director of Marketing and Promotion </li></ul><ul><li>Civil Aviation Affairs </li></ul><ul><li>Bahrain International Airport </li></ul><ul><li>E-mail smehdi@caa.gov.bh </li></ul>