Jazeera Airways eyes regional acquisition

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JAZEERA AIRWAYS: Regional acquisition and establishment of secondary hub are on the menu. (Getty Images)

Kuwaiti carrier Jazeera Airways plans to acquire or set up a regional airline this year as it expands in the Middle East, despite the global economic downturn, its chairman said on Wednesday.

The budget airline, which started operations in 2005, also plans to establish a secondary hub in the Middle East by the end of 2009, Marwan Boodai confirmed.

"We are now in the market looking for acquisitions... We feel that we'll have the opportunity this year to at least announce our first acquisition," he told reporters on the sidelines of an annual shareholders meeting.

Jazeera, which hopes to fly 82 routes in the Middle East within the next five years, is also in talks with the Kuwaiti government to set up a new terminal for its operations, Boodai said.

"Our main goal is to build maintenance workshops for the Jazeera fleet, to build a pilots' training academy... in addition to a terminal for Jazeera passengers," he said.

The Middle East was the only region where airlines saw any growth in passenger demand in March, according to the International Air Transport Association (IATA), with international passenger demand rising 4.7 percent from a 0.4 percent rise the previous month.

Boodai also said the carrier was planning to raise the capital of Sahab Aircraft Leasing Co, a leasing firm launched in 2008, to 45 million Kuwaiti dinars ($154.6 million) from its initial capital of 20 million dinars in the next two months.

This would then be increased to 85 million dinars in 2010, when there would be an initial public offering to be listed on the Kuwaiti bourse, he said.

The carrier, which also flies out of Dubai, competes with Sharjah-based Air Arabia and new carrier FlyDubai, which is due to start operations in June.

Boodai said flight restrictions in Dubai meant Jazeera had halted flights from Dubai to Khartoum and India's Kochi until winter, while other flights had been diverted.

"We optioned for the time being to scale down our Dubai operations," he said.

The restrictions would not have an impact on the airline's profit this year, he said.

"(For 2009) we hope to exceed our profits of 2008," Boodai said.

The airline posted a 93.5 percent rise in its net profit for 2008 of 4.45 million dinars compared with 2.3 million dinars in 2007. (Reuters)

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