Low-Cost Air Travel Set for Take-Off

By Fenn, John William | The Middle East, January 2004 | Go to article overview

Low-Cost Air Travel Set for Take-Off


Fenn, John William, The Middle East


The concept of cheap air travel, shown to be highly profitable by the likes of Ryanair and EasyJet in Europe, is set to revolutionist the commercial aviation sector in the Middle East and provide even more competition for the incumbent national carriers. Air Arabia, the region's first budget. airline operating out of Sharjah International Airport (UAE), made its inaugural flight to Bahrain on 28 October 2003. Another low-cost airline, menaJet, is also expected to give the more established carriers a run for their money.

The new budget airlines are keen to tap into one of the aviation sector's fastest growing markets--namely intra-Arab travel. According to figures released by the Airports Council International, which monitors passenger and cargo movements around the world, the Middle East aviation market grew by 5% in 2002 the highest figure worldwide. Other regions have not fared as well following the 'double whammy' effect of the 11 September terrorist attacks and severe acute respiratory syndrome (SARS). European passenger numbers recorded a zero growth rate while North America recorded a 3% downturn for the corresponding period.

Add Abdullah Ali, CEO of Air Arabia, said a combination of ticketless travel and a refined management/staff structure (approximately 100 employees) would keep operating costs down, enabling cheaper flights for its customers. Onboard meals will only be served if additional payment is made. Tickets will be available from travel agents to begin with, but Air Arabia hopes a dedicated website and call centre (operated by 16 bilingual agents supported by intelligent voice response solutions) will become the medium of choice for the majority of its customers. The low-cost airline expects to break even by the end of its second year.

Three departments of the Sharjah government--the Department of Civil Aviation, the Airport Authority and the Airport International Free Zone--have shares in the $50m project. The Department of Civil Aviation owns 40% of Air Arabia, while the others hold 30% each. Air Arabia will initially Focus oil intra-Arab travel with flights of between 45 minutes to four hours duration. Short-haul routes to Muscat, Bahrain, Qatar, Beirut, Amman, Damascus, Shiraz, Isfahan, Tehran and Cairo are planned. South Asia, especially India and Sri Lanka, are also likely destinations.

Meanwhile, mend Jet was scheduled to begin operations out of Sbarjah International Airport ill late December 2003, using two 162 seat Airbus A320 aircraft, although as this issue of The Middle Fact went to press the menaJet website was still not fully up and running. Landing slots have yet to be confirmed, but menaJet intends to keep within five-hour flight times and will concentrate solely on the intra-Arab marker. Bahrain-based Gulf Finance House (GHF) and Al Zamil, the Saudi business group, jointly own the venture. The company aims to double the number of passengers within three years, during which time it plans to add new investors, aircraft and a second operating base. Low fares will be possible by outsourcing support services, such as aircraft maintenance and engineering, to strategic partners. Free in-flight meals will nor be on the menu and passengers will be encouraged to book tickers online or through call centres in order to keep administrative costs to a minimum.

Follow my leader

Both Air Arabia and menaJet hope that the success of-Gulf Air's all economy, full service subsidiary--Gulf Traveller based in Abu Dhabi--bodes well for cheaper air travel. Gulf Traveller was introduced into the market in June 20015 as a precursor for what was seen as the inevitable entry of low-cost airlines into the Middle East. The cost-cutting airline, based in Abu Dhabi, flies six Boeing 767-300s and serves a number of Middle Eastern routes as well as offering a cheaper alternative for Asian expatriates. …

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