Cost cutting

The emergence of low-cost carriers in the Middle East has provided cheaper air travel for the masses. Lizzie Cernik looks at the region's leading budget airlines.
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ANALYSIS
ANALYSIS

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The emergence of low-cost carriers in the Middle East has provided cheaper air travel for the masses. Lizzie Cernik looks at the region's leading budget airlines.

Air Arabia

Air Arabia, recently named "Low Cost Carrier of the Year" at the inaugural Aviation Business Awards 2007, was one of the first budget carriers in the UAE.

The region's largest low-cost airline was established in February 2003 following an Ameeri decree issued by His Highness Dr. Sheikh Sultan Bin Mohamed Al Quassimi, the ruler of the UAE's Supreme Council. The company's management says it aims to provide convenient low-cost flights without compromising high standards. Operating under a "pay less, fly more" motto, the service offers fast check-in processes, internet bookings and amenable airport staff.

After only 18 months of service, the airline welcomed on board its one millionth passenger, a figure that had doubled by 2006.

The Sharjah-based airline has recently joined forces with FlyYeti.com, the first Nepalese budget carrier, and established a new hub in Kathmandu. With more than 35 destinations , Air Arabia aims to promote affordable fares to a wide range of countries across the Middle East, Asia and Africa. Adel Ali, CEO of Air Arabia, says: "This newest hub will give air travellers who use Air Arabia access to new destinations in India and wider South Asia, as well as the Far East and Central Asia." He adds this venture is testament of the company's ambitious nature and rapid growth since 2003.
 

Sheikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia, says: "As we set our sights on global expansion, we remain focused on youthful, fast-growing markets where the opportunities for growth are greatest. Nepal, with a population of 29 million and a median age of just 20, is clearly among them.

Bahrain Air

Starting operations in February, Bahrain Air is the first privately-owned premium low-priced carrier. The airline's inaugural flight landed at Dubai International Airport on February 3 to a water canon salute, followed by a welcoming ceremony.

The no-frills airline is focusing on medium-to-short-haul destinations, although large-scale plans to expand within the Middle East, Africa and Asia are also on the agenda. Using dry-leased A320s and B737-800s, the carrier already offers more than 10 destinations around the Middle East and Indian Subcontinent, including Colombo and Kuwait.

Mohammed Bin Ghannam, general manager for the airline development department of aviation unit at Dubai Airports, says the airline will be a premium low-cost carrier. "Bahrain Air is a unique addition to our list of 120 airlines serving Dubai International, and will cater to the specific needs of a large number of passengers.

The company has an ambitious three year plan, which involves increasing the fleet to four aircraft by year-end and 10 in 2010. If Bahrain Air's aircraft expansion strategy is successful it will be the fastest growing budget airline in terms of fleet development, according to management.

Bahrain Air director for commercial operations M. S Fakhri believes that changing attitudes towards domestic and international travel will contribute to the company's success. "With the current boom and the oil prices going up people can afford to travel - where as they used to travel once a year, now they can afford to travel four times a year. In fact, the low-cost airline model makes it affordable for you to travel eight times a year in theory.

Sama

Sama was founded by Investment Enterprises Ltd, which is chaired by HRH Prince Bandar bin Khalid al Faisal. When launched, the airline was backed by Mango Aviation Partners, a UK firm that specialises in low-fare carrier start-ups. The company operates six Boeing 737s and one Jet Turbo Stream to several destinations across the Middle East. Ambitious plans to expand are underway, with management expecting to have 35 aircraft by the end of 2010.

The carrier has recently launched customer care campaign, 'Just for you', to establish itself in an increasingly competitive market. The scheme includes a frequent flyer service, which awards regular customers with their 10th flight free of charge.
 

Despite experiencing an uncertain start while waiting for government licenses, Sama has developed, according to chief executive Andrew Cowen. "We've been able to make a strong start in the first year," he says. "We are already flying to 19 international destinations, so that's a really positive start. On the negative side, fuel costs have been going up and that's a serious concern to us."

Regarding the company's prospects, Cowen adds: "We want to continue expanding our network; that's our primary focus. We're hoping to buy between four and six aircraft this year depending on price and availability. This should allow us to expand our range of destinations, particularly in the Middle East.

Airblue

Originally serving the Karachi-Lahore and Karachi-Islamabad routes, Airblue began as a no-frills domestic service in 2004. Since then, the carrier has developed a wider range of services, including regular flights to Dubai. In June 2007 it became the first private Pakistani airline to venture away from Middle Eastern routes and embark on a long-haul journey to Manchester, UK. By last November, flight frequencies had increased, with the company offering daily services between the UK and Islamabad.

In late 2007, the airline secured a US$22 million loan from the IFC, a member of the World Bank, which will finance the pre-delivery payments for six A320s, adding to the six planes already in operation.
 

The carrier flew 1.4 million passengers in 2006-07, up some 7.7% from the previous year's 1.3 million carried across Pakistan. By last September, the airline had secured more than 40% of the domestic market, making it the country's fastest growing airline.

Jazeera Airways

Established in 2004, Jazeera Airways is the only budget carrier in the Middle East that is neither owned nor subsidised by any government.

The Kuwait-based company was inaugurated in October 2005 and carried 500 passengers during its first year of operation. During its opening 12 months, the carrier had increased passenger traffic at Kuwait airport by 10%. By 2007, the airport had seen a 20% rise in traffic, 14% of which was provided by Jazeera.

The no-frills service now operates six Airbus 320s to 23 non-stop routes in the Middle East, North Africa and Asia. By 2014, Jazeera's directors hope to have 40 aircraft, which will make the airline the largest Airbus 320 operator in the Middle East.

Adding more than one destination a month since its launch, the carrier is now the fastest growing in the Middle East. Chairman and CEO Marwan Boodai says: "We have in total launched 23 destinations in 22 months. In 2007 alone we launched nine destinations and a second hub. Some of the routes launched from Dubai are to Delhi, Kochi, Mumbai, Bahrain, Beirut. Muscat, Salahah and the Maldives.

"From Kuwait we added non-stop flights to Cyprus, Sharm El Sheikh, Tehran, Shiraz and Jeddah, in addition to more frequencies to Dubai and Bahrain. The company is determined to continue rapid growth during the next five years. In 2008 we are looking at a number of new routes - as well as reinforcing existing routes with more frequency," Boodai says.

In a bid to attract and maintain customers in this competitive climate, Jazeera has recently announced plans to supply its entire Airbus fleet with advanced technology, which will allow passengers to use blackberries and mobile phones on board. They will become one of the first airlines in the world to enable customers to communicate with friends and access emails during flights.
 

Rak Airways

During last year's closing months, Rak Airways finally got off the ground, launching three destinations within 24 hours of its first flight.

RAK Airways chief operating officer Captain Khalid Almeer says: "We are making history in the region. It is very rare for an airline to operate to more than one destination when it launches."

Following the success of the carrier's maiden flight, Almeer is positive about the company's future. "We look forward to servicing our customers and will take pride in making each flight a stress-free, comfortable experience."

Established in 2007 under an Emiri Decree by Sheikh Saqr bin Muhammad Al Qasimi, Rak Airways is the UAE's fourth national airline. The inaugural flight to Dhaka left Ras Al Khaimah International Airport on November 29 and was swiftly followed by services to Beirut and Colombo. Rak aims to increase the number of destinations to Qatar, Nepal, Tanzania and locations across the Indian Subcontinent during the next few months.

Sheikh Saud bin Saqr Al Qasma, Crown Prince and Deputy Ruler of Ras Al Khaimah, believes low prices and uncomplicated services will increase the demand for smaller, more convenient airlines and airports. "A lot of people are shying away from big airports because of the hassle," he argues. " There is a lot of potential for us to take a piece of that market."
 

The airline's directors hope to carry 80,000-100,000 passengers in its first year, with up to 20% growth expected during the next two years.

Nas Air

Nas Air is a ticketless, Saudi Arabian-based airline, operating domestic flights to 23 cities. Launched by National Air Services, it became the country's first low-cost carrier in December 2006 after it was awarded a license by the Saudi Arabian government. Initial prices began at US$26 for a domestic flight from Riyadh to Jeddah. Fares now start from $13 and the airline's management expects large numbers of Saudi Arabians to travel with the carrier, particularly when it starts flying internationally.

The company is based at King Khaled International Airport and only offers flight services within the Kingdom. The carrier launched with only two A320s, but has expanded rapidly since then and now operates seven aircraft.

National Air Services CEO Ed Winter is positive about the company's future development. "When we are allowed to fly international routes - which will be very soon - I see us providing a good service to Dubai three or four times a day, so people can choose their time of travel," he says. "It is designed for the convenience of the short-haul traveller.

The company is also planning to extend its budget flight services to Egypt, Beirut, Amman and Aquaba. Winter is adamant that budget carriers are the most convenient and sensible way to travel. "We used to always call ourselves LCCs, but I think it is a bit of a misnomer these days, especially in mature markets like Europe, the US or Australasia.

Nas Air aims to encourage domestic travel within the country and promote itself as the chief low-cost carrier in the area. To continue offering cheap tickets, the airline does not provide in-flight meals or a frequent flyer scheme. Despite omitting all luxuries from the price tag, Nas Air complies with strict international standards and says, under no circumstances, will it compromise passenger safety.

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