There are proven benefits to being a first mover into a new market, but when that market is a post-conflict zone, such as Iraq, the benefits are certain to be matched by risks. In April, UK airline bmi announced its intention to re-establish air links with the Iraqi capital Baghdad from London.
Bmi chief executive Nigel Turner met with senior Iraqi government officials during a recent conference in London and is confident that plans to launch in Iraq will go ahead in 2010. The airline can usually get a new route up and running within a few weeks but Mr Turner says there is a lot to consider in Baghdad’s case, not least the security situation. “Not just Iraq’s security, but security for our staff,” he says.
Although preliminary research has been completed, Mr Turner and his staff have yet to “look under the drains” in order to establish a comprehensive security strategy. The duty of care for staff and passengers means that any plan must be meticulous.
Being the first UK commercial carrier to fly to Baghdad will reap rewards in the long term, despite the obvious immediate security challenges. “The Middle East is a region where loyalty counts a whole lot more than in Western businesses and they remember their friends,” says Mr Turner, who has had this theory proven elsewhere. “Everyone was piling out of Saudi Arabia in 2005, running for cover, but that’s when we went in and that has not been forgotten,” he says.
Iraq is surrounded on four sides by countries that the airline already serves from London’s Heathrow Airport: Syria, Jordan, Saudi Arabia and Iran, which makes both geographical and economic sense for bmi to add Iraq to its network of services to the region.
The airline’s expansion strategy is focused on the Middle East, which Mr Turner characterises as “growing like topsy”, citing the lack of involvement with US and UK banks as the region’s saving grace. “Iraq is a trading nation; it has been and it will continue to be a trading nation,” he says.
As trade and business ties grow between Iraq and the UK, Mr Turner predicts huge passenger demand from both Iraqi’s and international business travellers. There may be some specialist tourist traffic but Mr Turner is quite sure that the country will never become a mass tourism destination.
Apart from the security situation, there is nothing about the business culture in Iraq that is different from the rest of the Middle Eastern countries in which bmi operates. The airline already flies routes from London to Cairo, Damascus, Jeddah, Khartoum, Riyadh, Tehran, Beirut and Tel Aviv.
Setting up shop
The company will relocate a member of staff to launch operations in Iraq and then recruit locally with no more than a handful of staff. The airline currently flies passengers from Baghdad to Heathrow via its existing intermediate point of Amman in Jordan.
“As the situation returns to normality, we are seeing a small number of scheduled services from Baghdad being launched within the region,” says Mr Turner.
Although bmi is unable to launch the service from Heathrow until the UK government permits UK aircraft or British registered carriers to fly in and out of Iraq, Mr Turner is confident that it is only a matter of time before the airline becomes one of the first European commercial carriers to fly to Iraq since the 2002 invasion.
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