UAE budget airlines setting the pace in region
Dubai - Air travel in the Gulf has seen tremendous growth after the dramatic takeoff of low-cost UAE carriers Sharjah-based Air Arabia, in 2004, and flydubai, in 2009.
The budget airlines, which initially served cities in the Middle East and North Africa, have expanded service to dozens of destinations in Europe, Africa and Asia, grabbing a significant chunk of the market.
A decade after beginning operations, Air Arabia flies to more than 115 destinations, including 15 routes launched in the first half of 2015, with a fleet of 44 new Airbus A320 aircraft.
“Constant innovation has been a particular feature of Air Arabia’s success over the past decade in such a highly competitive industry,” says Adel Ali, group chief executive officer (CEO) of Air Arabia.
“In January 2015, we became the first low-cost airline from the Middle East and Africa to enter the Chinese market. The launch of regular non-stop services to Urumqi in western China was a major move for Air Arabia and an important step in strengthening connectivity between the rapidly growing economies of the Middle East and Asia.”
Air Arabia operates from five bases — Sharjah and Ras al-Khaimah in the United Arab Emirates, Alexandria in Egypt, Casablanca in Morocco and Amman in Jordan. The airline’s business model is based on a single aircraft type, the Airbus A320, serving destinations that are within a five-hour flying radius from the hubs.
While European budget airlines mostly operate on routes of around two-hour flying distance, the UAE’s counterparts reach out to further destinations and second-tier cities.
“If you look at the Air Arabia route map, you will see an incredible array of destinations in the Middle East, Africa, Europe, the Indian subcontinent and Asia that can all be reached directly from one of our hubs,” said Ali. “Our approach of using strategic hubs around the region enables us to maximise the range of our A320 fleet and extend our route network.”
Early in 2015, Air Arabia bought a 49% stake in Jordan’s Petra Airlines, since relaunched as Air Arabia Jordan, opening the possibility of tapping into Jordan’s open-skies pact with Europe.
Ali explained that Air Arabia Jordan is a Jordanian carrier that was established to provide direct service from Queen Alia International Airport in Amman to a range of destinations, including Europe.
When it began operations six years ago, flydubai’s motto was “to take more people, to more places, more often.” The airline flies to more than 94 destinations. It carried an estimated 7.25 million passengers in 2014, according to CEO Ghaith Al Ghaith.
“We operate over 1,500 flights per week across a network of 94 destinations, which includes 59 routes that did not previously have direct air links to Dubai. Our extensive network provides connectivity for business and leisure travel across the Middle East, GCC [Gulf Cooperation Council], Africa, Central Asia, Eastern Europe and the Indian subcontinent,” Al Ghaith said.
Flydubai operates a fleet of 49 new Next-Generation Boeing 737- 800 aircraft with another to be delivered later in 2015.
Both airlines have the youngest fleets in the industry and the latest in their category, which helps them maximise operational efficiency, aircraft servicing and staff training.
Two years ago, flydubai created waves by launching a business class on selected routes, changing the conventions of budget air travel. At the end of 2014, business class was offered on 70% of its routes.
“Before 2015 is over, we will be able to offer business class as a consistent product throughout our network. Last year, we opened the business class lounge at Terminal 2 at Dubai International Airport,” Al Ghaith added.
Low-cost airlines need not be synonymous with lower service. Budget carriers could be 15-20% cheaper than regular airlines during off-season periods but offer the best value for money. A round-trip Dubai-Beirut-Dubai, for instance, costs an average of $303 on budget airlines compared to $504 on regular carriers.
“We don’t believe that the term ‘low-cost’ reflects who we are when you consider the level and range of services that we offer, our route network and connectivity. We run our business efficiently but our product offering goes beyond what you would expect from a low-cost carrier and we know that we exceed our passengers’ expectations in our onboard experience,” Al Ghaith said.
Experts acknowledge the pioneering role of the carriers in revolutionising budget air travel.
“Flydubai has mastered the art of competitive innovation with the introduction of both a major cargo operation and the launch of a dedicated business-class product,” said Saj Ahmad, chief analyst at Strategic Aero Research, a London-based aviation consultancy.
“They dominate proceedings in the GCC region and are unlikely to be threatened at all by any action or movements made by regional competitors like Kuwait-based Jazeera Airways or Saudi-based flynas or anyone else,” he said.
Premjit Bhangara, general manager of Dubai-based Sharaf Travel Services, commented: “What these two airlines did was to offer point-to-point airfares that were cheap and affordable to both the expat worker segment as well as the corporate and leisure traveller.
“Overnight destinations like Istanbul, Kiev, Odessa, Bucharest, Cairo, Baku, Amman, Beirut and a host of cities in the Indian subcontinent became affordable to the budget traveller and also brought in a lot of inbound travel into the UAE, benefiting the retail and other sectors immensely.”
Profits made by the two airlines, with Air Arabia achieving $65 million so far in 2015, and flydubai $68 million in 2014, attest to their big success.