Mahan Air makes waves

ATN: What are Mahan Air’s most popular routes and why?

There is a huge Iranian community in the UK, as well as a large Pakistani and Indian ex-pat community. Therefore, flights from Birmingham and Manchester are very busy, not only carrying passengers to Iran, but onward to the Indian Subcontinent.

Manchester [via Tehran] to Bangkok is also very popular as there are few airlines that offer links between the two cities, particularly at such competitive prices.

Bangkok is one of our busiest routes and we plan to increase the number of flights (from Tehran to Bangkok) from daily to 10 times weekly by the summer.

We also have many business travellers flying from Düsseldorf to the destinations we offer, particularly Bangkok.

ATN: What is the growth plan for Mahan Air?

Our real growth will come from the Sixth Freedom traffic*. The number of passengers who transit through Tehran is 30% at present, but by the end of 2007, it will be 60%.

We are planning to introduce several new routes this year, including Stockholm in Sweden, Almaty in Kazakhstan, Manila in the Philippines and Bishkek in Krygyzstan.

Although we are proud to have a strong flag carrier in Iran (Iran Air), at the same time, we have a major part to play in Iran’s aviation industry. We feel that in the next year or so, we will be the key player in this market, not just in terms of flights, but in terms of the service we provide. We are currently recruiting 350 additional cabin crew.

ATN: What factors are helping to fuel Mahan Air’s growth?

Iran is a country with massive population of more than 70 million. There is also a large [Iranian] ex-pat community. Each Iranian ex-pat living in North America or Europe visits Iran once or twice yearly, and so that’s one area on which we intend to focus.

In terms of Sixth Freedom traffic, we see growth from the Indian labour market, although there are [frequency and route] limitations there. We fly five times weekly to Delhi and four times weekly to Cochin, but we would like daily flights. We are also trying to introduce double and triple dailies on all internal flights, but because fares are regulated, it is difficult to make money on domestic routes.

ATN: What factors have hindered Mahan Air’s development?

Before 2001, we saw huge growth in tourism. In June and July in 2001, if you went to the big hotels in Tehran, it was just like Bangkok – very busy, mostly with European guests. But after 9/11, even though Iran had nothing to do with it (the terrorism attacks in the US), overnight, 80-90% of business was lost. It came back up until the government changed and travel sanctions were imposed. We have 70 million people here with a huge GDP, and the Iraqi experience has shown the international nations that you cannot really do such a thing to a country. We are too big and too rich to take sanctions like that.

ATN: What are the major challenges of running a private airline in Iran?

We have the consent of the UK Government to add frequencies [to UK destinations], but the Iranian Government says no, to protect Iran Air. To establish new routes and more frequencies, we have to provide the government with evidence that it will be successful.

The government is very keen to see us invest in new infrastructure, employ more people and buy new planes, and we are doing everything possible, but there is a lot of red tape.

ATN: What percentage of bookings are made by travel agents?

More than 90 percent of total worldwide sales are through agents, but in Iran it’s 100 percent. We introduced online booking in January and we expect the major uptake to be in Europe where everyone books online; more than 20% of sales in Germany are online already. In Iran, we expect a penetration of 10%. We wil launch a big marketing campaign in Europe from February. [However], we sincerely think that travel agents are a big help to us and we don’t have the budget to drive all the sales directly to us.

ATN: Do you consider Etihad Airways, which recently started services to Tehran, a threat?

We always welcome competition and we encourage the civil aviation industry to open up the market. No one benefits from a closed market. As long as Etihad doesn’t offer predatory fares and products, we will be fine. We are confident we will keep our market.

ATN: What future do you predict for Iran’s tourism industry?

If the political situation allows it and if this young industry is developed well, then it will have a good future. In Iran, anything is possible. We have not invested a great deal in inbound tourism because we want to have a sure thing.

The smallest things that are said by Iran are repeated again and again and people judge us by what they hear and see on TV. This prejudice hampers growth.

* Sixth Freedom traffic refers to the right to carry passengers or cargo from a second country via the home country (in this case, Iran), to a third country.

Vital statistics • Five million passengers travelled on international flights from Iran in 2005.

• Mahan Air has a 13% share of international flights from Iran.

• Iranian carriers operate 63% of international flights out of Iran.

• Twenty-three international airlines fly to Iran. Emirates Airline is the top international carrier into Iran, with 400,000 passengers in 2005.

• Eighty percent of domestic flights are bound for 10 Iranian airports, including Tehran, Shiraz and Isfehan.

• Ten domestic airlines operate in Iran and in 2005, 10.5 million passengers were carried on domestic routes, representing year-on-year growth of 12%.

The sales pitch Airline: Mahan Air.

Established: a privately owned airline founded by a charity organisation in1991.

Location: headquartered in Tehran, Iran Fleet: 25 Airbus aircraft (A300, A310, A320).

Current destinations: 27 in 13 countries, including Bangkok, Birmingham, Cochin, Damascus, Dammam, Delhi, Dubai, Düsseldorf, Erbil, Jeddah, Lahore, Manama, Manchester, Sharjah, and several internal destinations (accounting for 55% of routes).

Planned destinations for 2007: Stockholm in Sweden, Almaty in Kazakhstan, Manila in the Philippines and Bishkek in Krygyzstan. Within the GCC, Mahan Air is considering Kuwait.

Wishlist: several destinations in China, Kuala Lumpur, London Heathrow, and more flights to destinations across India.

New products in the pipeline: wireless headphones, digital in-flight TV entertainment systems, catering enhancements and service improvements.

Middle East sales offices: in Bahrain, Dubai, Iran, Saudi Arabia, and Syria.

Related businesses:
Mahan Air recently opened an office dedicated to leisure, which is located in Deira, Dubai. Mahan Destinations offers holiday packages to several destinations served by Mahan Air’s network, as well as inbound tourism to Iran.

"Our real growth will come from the Sixth Freedom traffic."

"We feel that in the next year or so, we will be the key player in this market, not just in terms of flights, but in terms of the service we provide."
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