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Thu 26 Feb 2009 04:00 AM

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Fly for le$$

Despite economic turbulence, low cost carriers in the region seem prepared to soldier on. Aviation Business profiles the industry leaders.

Despite economic turbulence, low cost carriers in the region seem prepared to soldier on. Aviation Business profiles the industry leaders.

As the global financial crisis begins to affect the previously affluent Middle East, it seems logical for low cost carriers to prosper. However, while prices are lower than legacy carriers in the region, budget fares do not compare with cheaper European equivalents, Ryanair and Easyjet.

Huge airport taxes mean that, despite the initial bargain price tag, passengers will pay over the odds for ‘cheap' tickets. In Saudi Arabia, privately owned carriers are struggling against fare caps, which are imposed on all non government airline routes.

And for low cost carriers in the country, it is unfeasible to pass on the expense to consumers, as it would destroy the budget model. In addition, while the government subsidises Saudi Arabian Airlines' fuel costs, the private carriers are left to fend for themselves in times of financial uncertainty.

After six months of crippling fuel prices, followed by worldwide recession, it is unclear whether all low cost airlines in the region will be able to bear the financial repercussions.

But for now, as we head into another turbulent year, airline management teams in the Middle East remain confident they will ride out the storm and achieve future success. Air Arabia

The Middle East's first low cost carrier, Air Arabia, has expanded rapidly since its 2003 launch.

At present the airline operates 16 aircraft and is waiting on deliveries of 34 A320 aircraft that were ordered from Airbus at the end of 2007. In November last year the carrier signed another deal with the aircraft manufacturer for the purchase of a further ten A320s.

Serving 44 destinations across Asia, the Middle East and Africa, Air Arabia is not only the first, but also the largest low cost airline in the region.

And despite credit crunch fears and last year's astronomical oil prices, the airliner has continued to win awards for its success, including low cost carrier of the year at November's Aviation Business Awards. In addition Air Arabia has recently expanded its vast network to include Nairobi in Kenya and Kiev in the Ukraine.

Modelled on the successful European low cost carriers, the ‘pay less, fly more' mantra has attracted over 10 million passengers in the past five years. Following this milestone last year, AK Nizar, head of the commercial department at Air Arabia was positive about the airline's future.

"As we continue to expand our list of destinations and grow our fleet, we hope to introduce even greater numbers of people to our award-winning service and competitively priced fares," he explains. "We look forward to passing another ten million passenger mark in a very short period of time."

The carrier's main base is located in Sharjah, providing easy access to Dubai, fast check-in processes, low congestion and access to other commercial airlines serving the airport.

In addition, to accommodate the high passenger numbers and stimulate further growth, a secondary hub is to open in Casablanca, Morocco, with operations scheduled for later this year. Nas Air

Saudi Arabia's first low cost airline, Nas Air, was launched in February 2007 by established private aviation group, National Air Services.

Operating one of the youngest fleets in the Middle East, the ticketless airline, flies to several destinations in the region. With some 11 domestic routes, and five international, the company has seen considerable growth since its launch two years ago.

The carrier offers low fares in a bid to encourage domestic travel within the country and promote itself in the area. To minimise expense, Nas does not offer in-flight meals or a frequent flyer scheme.

But despite omitting all luxuries from the price tag, the airline will not compromise on safety and complies with strict international standards.

According to management, large numbers of Saudi Arabian travellers use the service which is designed for ‘the convenience of the short-haul traveller'. Sama

Saudi Arabian-based airline Sama was founded by Investment Enterprises Ltd nearly two years ago. The company, which was originally headed by Andrew Cowen, has recently appointed a new CEO, Bruce Ashby, to replace Cowen.

When the airline was first granted flying rights in 2006, the Saudi Arabian Civil Aviation Authority (SACAA) limited the license to domestic routes for the first two years.

However, this rule made life difficult for the carrier due to the high fare cap charges which were introduced at the start of the century. After a long battle, the carrier was granted international flying rights sooner than expected, which are far more profitable to the company.

Today, Sama flies to several destinations across Saudi Arabia, the Middle East and Asia, including Mumbai and Egypt. A frequent flyer programme is in place to help the carrier establish itself in what has become a very competitive market.

Meanwhile the company has put its deliveries on hold while it waits out the financial storm. FlyDubai

The UAE's newest low cost carrier is expected to begin operations from the Al Maktoum International Airport later this year.

FlyDubai, which is run by local emirati, CEO, Ghaith Al Ghaith, made history at last year's Farnborough Air Show with a massive US$4 billion order for 54 fuel-efficient Boeing 737-800s. With the first deliveries of this massive fleet, the budget carrier expects to serve some 12 destinations in the GCC area, India, Pakistan, Iran and the former Soviet Union countries.

"We've not decided exactly where the launch flight will go," says Al Ghaith. "We'll be flying a combination of routes in order to fully utilise the time. We'll use the planes and time as efficiently as possible."

During its start up the new venture has been supported by legacy carrier, Emirates. "The actual airline is owned by the government of Dubai," explains Al Ghaith.

"Emirates has just been helping us to begin. In fact recruitment has already begun. We hired Captain Ken Gile for the position of chief operating officer. He has a wealth of experience working with low cost carriers and we are proud to have been able to attract him to Dubai. His experience will be invaluable in getting FlyDubai off the ground," he adds. Although the airline will be running as an independent entity, it will still be employing maintenance and engineering facilities from Emirates. Jazeera

In 2004 the Kuwaiti government allowed the establishment of non-governmental airlines for the first time. Dependency on the country's legacy carrier ended and Jazeera Airways, which was based on the popular low cost model, was launched.

The carrier, which began operations in October 2005, flies a fleet of six Airbus A320s to popular destinations across the Middle East, North Africa, and Asia. Jazeera has a firm order for a further 34 aircraft, which are due to be delivered between now and 2014.

CEO Marwan Boodai, believes robust cost management and excellent services have propelled the carrier to success. "We carried 100% more passengers than 2006 as more and more customers choose us for our on-time performance and quality service," he adds.

For business travellers, the budget airline has created J+ (Jazeera plus), which guarantees passengers priority when boarding and landing. In the J+ area there is additional space and privacy as well as a small work table in place of the middle seat.

Though many low cost carriers choose not to provide any entertainment, Jazeera travellers can access the latest Hollywood movies on any of the 8.4 inch screens situated throughout the cabin. In addition the airline serves a complimentary meal box containing snacks and sandwiches on every flight. Bahrain Air

Bahrain's budget airline was launched in 2007 as the country's first privately owned low cost carrier.

Operating with a modest fleet of A319s and A320s, Bahrain Air flies to several destinations in the GCC, Levant, Africa and the Indian Sub-Continent. Its mission is to continue offering customers a variety of choice in the region at good prices and to establish Bahrain International Airport as a major hub in the region.

In November, the carrier welcomed a third aircraft to its fleet, an Airbus A319 BAX. "The aircraft is designed to optimise revenue through cabin adaptability and passenger comfort, the Airbus A320 family of aircraft features the most modern and complete fly-by-wire technology available on any single-aisle aircraft in the 126-seat category," says Abdul Moen Bastaki, Bahrain Air's senior technical manager.

Recently, the carrier has begun preparations to launch flights to the Nepalese capital, Kathmandu. The thrice-weekly operations are expected to begin early next month, upon the arrival of the airline's fourth aircraft, another Airbus A319.

Ibrahim Alahamer, Bahrain Air's managing director says that once the new aircraft has arrived, the company will be expanding its network.

"With the strengthening of economic ties between the Kingdom of Bahrain and Nepal, there has been a marked increase in business and tourist traffic between the two countries. This calls for enhanced connectivity and Bahrain Air is fulfilling this need," he adds. In addition, plans to launch flights to Abu Dhabi and Calicut, India, in March are well underway.

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