Dubai its time for LOT to start flying there

Why LOT should start flying Dubai ? Expo 2021 will support that decision?  Is Dubai a leader of winter sales in Poland ?

Dubai, despite the covid crisis, seems to be one of the first destinations that are beginning to „bounce off the bottom”. Traditionally, it was also the largest winter destination in terms of volume in the past winter seasons. The potential of the destination was noticed by Wizz Air and Fly Dubai, offering flights from Katowice and Krakow, respectively. Does LOT see this trend and what means that it cannot dare to compete with Emirates?

Growing potential of connection to Dubai – if not now, when?

This year was supposed to be the year of Dubai.  Without a doubt, all thanks to the Expo which was supposed to beat all previous events of this type. Covid forced the organizers to postpone it.  Which, paradoxically, is a chance for LOT. However, already in previous seasons, Dubai was the star of the dynamic packaging offers.   Agents / leaders of this market, e.g. Best Reisen, Exim and Top Touristic.

Additional factors will surely determine the long-term growth of this destination

When it comes to tourism, we predict an increase in interest in Ras Al Khaimah.  An emirate that invests in mass tourism, but also in MICE tourism. It will be a generator of significant group traffic in the future. Dubai Park and Resorts have also started investing in Central Europe. Promoting their theme parks – this is another contribution to growth. Dubai has also become an interesting destination for Polish golfers looking for places to play in winter. The Emirate of Dubai itself also invests significant resources in advertising in Poland. The latest materials promoting this destination will soon be available on the TVN screens.

Destination will also grow in the field of strictly business travel. Over 100 Polish companies are already present in the region, including champions Inglot, CCC, Nowy Styl Comarch. Other Polish startups, such as Celon Pharma from the pharmaceutical industry or the photovoltaic MLS, announce their entry into these markets recently. And these are just a few of the many examples.

Why is LOT not opening a connection to Dubai?

We certainly have two key reasons. Fear of competition with Emirates and fleet shortages. The first factor seems to be greatly exaggerated, Emirates has quite high unit costs when operating a large plane, and it cannot count on the traffic supply via Warsaw. Average prices to Dubai are still quite high and the potential for a price reduction by Emirates is very moderate.

The second factor seems to be a bit more important – LOT does not have a suitable narrow-body aircraft to offer this connection. The aviation versions of the Max will not reach Dubai. However, there is a remedy for this. Soon, LOT will receive great public aid.  Some of it will certainly be used for leasing new aircraft or changing already concluded contracts. There are signals from LOT that he wants to invest in the charter market.  He needs planes that will fly to Dubai, Oman, the Canary Islands, Luxor or Madeira.

Riga and Kiev can cope with why not Warsaw ?

It is worth looking at the neighboring markets. For example, Ukraine and Latvia have been connected with the United Arab Emirates for years. A narrow-body plane does not mind. Additionally, the Air Arabia line from Prague and Kiev also offers a narrow-body product. LOT should draw the appropriate conclusions.

Launch Dubai to scary off Emirates / Air Arabia and Fly Dubai

Undoubtedly, launching a connection to Dubai would also effectively slow down the plans to increase the number of connections from Warsaw by Emirates. The profitability of the Warsaw Dubai connection is still being built on point-to-point traffic. (Warsaw-Dubai-Warsaw) The reduction of the average price as a consequence of LOT’s entry into this connection will effectively thwart any plans by Emirates. It can also be assumed that at least 70% of the competitor’s connection is supplied by the Polish market. While losing part of this pie, there is nowhere to make up for „this hole”.

We also obtain an additional effect of deterring other daredevils, the analysis of the Warsaw Szardja ​​connection was prepared by the Air Arabia . The resumption of Fly Dubai flights to Krakow could also be questioned. These are all important factors that should additionally encourage LOT to offer an alternative.

Transfers to Ethiopia, Kenya and Tanzania

Although the traffic via Dubai would not be the main aspect of the analysis of the profitability of such a connection.  There is also such an added value. The more so as flights to Africa could take place with a stopover in Dubai. This would be an interesting offer for MICE agents and a growing group of boutique agents serving Africa.

Certainly, a greater potential impact on profitability has to attract traffic via Warsaw from Central Europe. You can also fight for the movement from Scandinavia. Which is always higher-paid due to the purchasing power of the local society.

It seems that there is no better moment to launch this connection . It fits perfectly with the entry into the holiday and charter destinations segment, as declared by LOT Management Board members. Of course, there is no problem with summer destinations because it is a relatively simple choice. Flying in winter to warm countries without Dubai on offer does not seem to make sense. The more so as LOT got the chance in the form of the Expo 2021 – starting the connection in winter 2021 would be a bull’s eye.