Qantas spends most of $35 billion on future jets in two years and Emirates spends $39 billion in two days. Where will it all end?
The most popular theory in Australian aviation circles is that it will end with bush pilots again earning more than plumbers or dentists, or alternatively, with bush airlines slashing services because too many pilots take up offers from bigger airlines with flashier jets.
It is what Virgin Blue CEO Brett Godfrey calls the lure of “metal envy.” However it is not clear that this will be enough for Virgin Blue or Qantas/Jetstar to renew and expand pilot ranks as fast as new fleet is delivered.
The top dog in regional aviation, REX, is so far unflinching in holding down pilot wages, and vocal about the fact that it is running out of pilots. Carriers like REX (which makes outstandingly good margins) are critical parts of the pilot food chain that leads to jobs with bigger airlines.
It is a similar story almost everywhere except in the aviation Disneyland which is Dubai, and Abu Dhabi and Bahrain. Airlines are determined to hold down labour costs, the flight standards skills they need are predominantly held by people who will mostly retire between now and 2020, and the costs of becoming an airline pilot are so high that anyone smart enough to become one would be smart enough to choose a different career.
Apart from the huge Emirates and Qantas orders, a two year old investment vehicle funded by the same sea of money as Emirates — called the Dubai Aerospace Enterprise — became a major jet lessor this week by buying 200 assorted jets, divided equally between Airbuses and Boeings, for other non UAE carriers presumably including the ones that might be bought by yet other investment vehicle based in the Gulf.
There is no sign Dubai money wants to buy into an Australian airline, and most likely won’t be until an hour or so before the surprise press conference is called, should the current infatuation of UAE funds managers with ports, alternative energy technology and the odd airport or tourism resort development suddenly name an opportunity.
Australia is currently being mined for its pilots and systems and maintenance engineers by the two UAE carriers, Emirates and Etihad. But around 20 of the 58 giant A380s Emirates has so far ordered seem tagged to fly routes between here and the global super hub it is setting up at an all new Dubai airport now under construction.
That’s as many A380s as Qantas has on order to serve the US and Europe markets. Never mind Singapore, the Qantas versus Dubai contest is the one to watch closely.