Flying for less

When the Dubai Government announced it would be launching a new budget airline, many of the established and start up carriers may have felt threatened.

But FlyDubai, as it has now been named, is not here to put other airlines out of business. CEO Ghaith al Ghaith argues that the popularity of low cost air travel means there will be plenty of business for all competing carriers.

The company, which hopes to be operating independently by the end of year, is expecting the arrival of its first Boeing aircraft in 2009 for the big debut.

Meanwhile, the UAE's first low cost carrier, Air Arabia, is enjoying continued success, winning the Skytrax ‘Best Airline in the Middle East' award for the second consecutive year.

During the first six months of 2008 the company registered a turnover of US$237 million, a massive 71% increase from the same period the previous year. In addition, the Sharjah-based carrier, which was launched in 2003, flew 1.6 million passengers and launched four new destinations including Kozhikode and New Delhi in India.

In Saudi Arabia budget carriers like NasAir and Sama are struggling due to fare caps and fuel prices, which for them are not government funded. The fact that Saudi Arabian Airlines is heavily subsidised by the government has long been a bone of contention for the two commercial carriers.

Both Andrew Cowen, CEO of Sama and Ed Winter, CEO of Nas, have commented on these discriminatory practices, arguing that it's time for change.

But despite setbacks Sama has managed to launch several international destinations in its first year of business, some of which were ahead of the original schedule.

In fact, the airline's shareholders have been so impressed with the young carrier's developments, they've recently offered to strengthen Sama's position with US$53.3 million worth of financing.

As the global credit crunch continues to take hold, it seems low cost is the only realistic option for most.

Their popularity in the Middle East was once questioned, but now it seems budget airlines have well and truly established themselves in the region's rapidly growing aviation market.

Lizzie Cernik is the assistant editor of Aviation Business.

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