Magazine article The Middle East

Low Cost Airlines Enter Gulf Market; Low Cost Airlines Have Revolutionised Travel in Europe, with Some Fares-Between London and Ireland or the South of France-As Low as 1 [Pounds Sterling]. Now the Revolution Has Reached the Middle East

Magazine article The Middle East

Low Cost Airlines Enter Gulf Market; Low Cost Airlines Have Revolutionised Travel in Europe, with Some Fares-Between London and Ireland or the South of France-As Low as 1 [Pounds Sterling]. Now the Revolution Has Reached the Middle East

Article excerpt

The airline sector in the Middle East has long been conservatively structured. The largely state owned companies which dominate the region have been quick to adopt private sector style advertising and standards of service but competition on price has never been especially fierce and tickets are generally expensive by global standards. Now, however, the hunch of the Middle East's first low cost airlines (LCAs) could provide evidence that things are about to change.

While most traditional airlines around the world have struggled to cope with falling demand since the 9/11 terrorist attacks in the United States, many LCAs have gone from strength to strength over the past three years. Southwest Airlines in the US was the world's first genuine LCA but the concept only really took off when advances in IT enabled the introduction of ticketless travel. UK based easyJet and Ryanair have revolutionised air travel in Europe by utilising capacity at less congested airports and concentrating sales online.

Today, low costs--otherwise known as budget or no frills airlines are operating in Brazil, India, South Africa, Australia and now also the Middle East. Sharjah based Air Arabia was launched in February 2003 following the issue of an Amiri decree by Sheikh Sultan bin Mohamed Al Qasimi, the Ruler of Sharjah. The company began services in October from Sharjah to Bahrain, Tehran (Iran), Kuwait, Beirut (Lebanon), Muscat (Oman) and Syria (Damascus), while flights to Cairo (Egypt), Colombo (Sri Lanka), Doha (Qatar), Sana'a (Yemen), Saudi Arabia and Shiraz (Iran) are all due to be launched.

The company is currently using two Airbus A320s, while two further A320s are scheduled for delivery during 2004. Like many ticketless LCAs, the company hopes to encourage online booking, although a call centre has also been set up. The airline's chief executive Adel Ali says that fares will vary greatly according to demand but pledged that prices would always be at least 25% lower than those offered by competing airlines operating on the same routes. Adel added: "The aviation industry in the Arab world goes back 70 years, and is solely constituted of national airlines. We wanted to be the first Arab airline to provide affordable travel to all the people of the region."

Sheikh Tariq bin Faisal Al Qasimi, the chairman of the Sharjah Economic Department said: "The airline will give a shot in the arm to both tourism and the airline industry in the country. We expect a big increase in intra-Gulf tourism, as people will have the option to travel frequently and at low fares.

The choice of routes indicates that the airline also hopes to attract custom from the many foreign workers who fill relatively low paid jobs in the United Arab Emirates, including those from the Indian Sub-Continent and the Levant. Although the company will undoubtedly attract expatriate custom from other airlines, many Lebanese and Syrian workers who currently drive to and from the UAE may now be persuaded to fly.

Another UAE based no frills airline is due to begin operating two Airbus A320s by the spring. Also based at Sharjah International Airport, menaJet is jointly owned by the Gulf Finance House (GFH) of Bahrain and Al Zamil of Saudi Arabia. GFH's chief executive Esam Janahi commented: "Sharjah was chosen because we could fast track the entire registration process. The authorities were willing to provide all the facilities, and Sharjah offers an ideal base from which we can target our likely clientele."

Despite sharing facilities with Air Arabia, there is not expected to be any conflict of interest at the airport. …

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