Unable to secure more traffic rights to fly out of Amman, Air Arabia’s venture in Jordan is unable to grow and has moved to charter operations instead, the Sharjah-based carrier’s chief has said.
CEO Adel Ali told reporters at an industry conference that the carrier has been operating as a charter broker since November because it is unable to fly direct to other catchment locations in the Middle East and Europe from the Jordanian capital.
“Air Arabia Jordan’s growth has been capped by traffic rights that could allow it to grow its network. We will resume scheduled flights one we secure the necessary approvals,” he said.
In the meantime, there seems to be “sufficient demand for charters,” he said.
The Sharjah-based low cost carrier began operations out of Jordan in 2015 as Air Arabia Jordan by investing in 49 percent of a joint venture with Petra Airways currently and flying two A320s out of Amman.
Ali didn’t suggest why it hasn’t been able to secure rights, but the CEO of competitor Royal Jordanian has been vocal about driving down fares “to squeeze out any competition” to the country’s state-backed airline.
Load factors, a measure of how much of how many seats an airline is able to sell per flight, on Royal Jordanian had plunged to 60 percent, far below the industry average, before Pichler was appointed CEO in May.
By aggressively charging low fares, Pichler has managed to help Royal Jordanian remain competitive and post improved quarterly results on the back of more ticket sales, the CEO said.
“We want to be the carrier of choice in the country,” Pichler told sister publication Aviation Business in an interview in September, “and we will decrease fares as much as we need to boost our load factors.”
However, in conversation with Arabian Business, a spokesperson for Air Arabia insists the airline’s suspension of scheduled flights is unrelated to Royal Jordanian’s pricing strategy, and “a commercial decision” instead.
In a low fare open skies environment, being able to fly to more destinations is key to commercial success, he said.
“We strongly believe in the Jordanian market, as well as its ability to have more than one home-based carrier. Opening up air travel and fair competition can only grow the market size bigger by attracting more visitors and as a result have far greater benefit to the local economy,” the spokesperson added.
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