Low cost equals high returns

  • Share via facebook
  • Tweet this
  • Bookmark and Share
Jazeera Airways — led by chairman Marwan Boodai — has more than tripled its net profit in the first quarter of 2013.

Jazeera Airways — led by chairman Marwan Boodai — has more than tripled its net profit in the first quarter of 2013.

European low-cost carrier Ryanair was recently styled as ‘the world’s favourite airline’ by the International Air Transport Association (IATA). Carrying 80 million passengers, it was more than rivals Easyjet and British Airways combined.

Luckily, Gulf low-cost carrier Jazeera Airways doesn’t have to compete with the frugal Irish carrier, which is adept at both keeping costs down and rubbing its staff and passengers up the wrong way.

While not in the same league as controversial Ryanair boss Michael O’Leary when it comes to generating headlines, Jazeera Airways chairman Marwan Boodai similarly doesn’t like to mince his words and, in true Kuwaiti style, likes to tell it like he sees it.

While Ryanair has been able to set up around 50 bases around Europe, in addition to its main hub in Ireland, the amount of red tape involved in replicating the same network in the Middle East would be too risky and is not worth attempting, Boodai states.

“Having other locations is good but let’s not forget that the challenges and risks entangled in our part of the world in the Middle East is so high that you won’t risk your investors’ money to do that,” Boodai says.

It’s not to say some haven’t tried: UAE low-cost carrier Air Arabia has its main hub in Sharjah and has launched subsidiaries in Egypt and Morocco.

“If you compare to Easyjet or Ryanair, you can easily open up in Europe and get yourself a base in Marseille or other parts of Europe,” Boodai says.

“In the Middle East, we still don’t have the regulatory framework that allows us to freely open up and obtain local AOCs [Air Operators Certificates] on subsidiaries. It becomes so complex, so as a board we have decided to shelter Jazeera Airways completely from any hubbing, or other operations, unless the regulations change.”

Last year, at one point, it looked like Ryanair might be about to dip its toe into the Middle East when the Lebanese government said it was trying to persuade European low-cost carriers to start flying to the country. Nothing transpired, but Boodai wasn’t surprised and again declared that the Ryanair model in the Middle East “won’t work.”

Article continued on next page...


Market Performance

Jazeera Airways
-10.0 -2.17 (%)
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Stronger together? Reviewing Emirates' historic partnership with Qantas

Stronger together? Reviewing Emirates' historic partnership with Qantas

One year after the “historic” Emirates-Qantas partnership deal...

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia to use tried and tested model in Ras Al Khaimah

Air Arabia signed an agreement last month to become the official...

Is Saudi Arabia ready for take off?

Is Saudi Arabia ready for take off?

Saudi Arabia has announced two new airlines and $30bn worth of...

Most Discussed
  • 15
    Germany puzzled as UAE think tank ordered to close

    Matt, your words sound kind of funny given the role the Britain has played in this region for so many decades.
    And given the democratic tradition that... more

    Thursday, 17 April 2014 7:10 PM - one of the joes
  • 10
    UAE father who whipped son to death wins appeal

    "Under Sharia, a parent cannot be executed for killing their child"
    A spouse could be executed if he/she kills his/her spouse, as none of them is... more

    Friday, 18 April 2014 3:38 PM - Nihar
  • 3
    To diet or not to diet?

    It is best to eat by your blood type. Following this diet is miraculous. Generic diets don't always work as certain foods are not good for the individual... more

    Friday, 18 April 2014 11:49 AM - Shamira Mitha
  • 54
    Three UAE women attacked with hammer at London hotel

    I really feel that Arabian Business.Com should now close this comments page. This should be all about sympathy for the families not what it is/has turned... more

    Wednesday, 16 April 2014 1:06 PM - Adrienne
  • 51
    Why Dubai isn't a plastic city

    What is definitely not a plastic city. The Arabs have a culture dating back to several centuries. 50 years back Dubai was just a fishing village. Today... more

    Tuesday, 8 April 2014 3:49 PM - P. MADHUSUDAN
  • 48
    DMCC boss Ahmed Bin Sulayem entertains Robert Mugabe in Dubai

    @fga ''However today, simply because he decided to dispossess a few white farmers of their land and redistribute to the poorer indigenous blacks'' more

    Sunday, 13 April 2014 3:02 PM - Matt Williams