High demand for low cost carriers in the region

With the growing popularity of low-cost travel in the Middle East, it seems the market is a hive of activity at the moment
High demand for low cost carriers in the region
By Robeel Haq
Fri 18 Feb 2011 12:00 AM

With the growing popularity of low-cost travel in the Middle East, it seems the market is a hive of activity at the moment. According to research by YouGov Siraj, two-thirds of leisure travellers (67%) and three-in-five business travellers (58%) expect to travel more on LCCs in the next year. In contrast, only about one-in-eight (13%) leisure travellers and one-in-five business travellers (19%) say they are less likely to use LCCs this year.

It’s little wonder, therefore, that the likes of Qatar Airways and Royal Jordanian are both considering the future prospect of launching a budget subsidiary. But what are the existing low cost carriers doing to prepare for this growth? A lot, it seems. One of the region’s leading players, Air Arabia, will cement its market position with the opening of a Jordan hub in the summer, while its network will be expanded from 67 to 75 destinations by the end of this year. Speaking at a recent conference in Dubai, the airline’s CEO Adel Ali also confirmed to our reporters that six Airbus A320s will be delivered in 2011.

Not to be left behind, FlyDubai also started the year with a bang, after commencing its first flights to Bangladesh last month – its 30th destination being Chittagong. “2011 is going to be a year in which we experience many more occasions to celebrate as we continue our growth,” we were told by chief operating officer Hamad Obaidalla.

And then there’s RAK Airways, the youngest member of this gang. The airline has a troubled past – senior management have come and gone, while operations were also suspended for over a year – but after interviewing the latest chief executive officer, Omar Jahameh, it seems RAK Airways is finally on track with its business model. Although there’s a slight twist in the story. While tickets are being offered from as little as AED10, Jahameh is adamant that the business will not compete with Air Arabia and FlyDubai. Neither will it take on the might of Emirates and Etihad. “We’ve taken the middle ground, between the two models,” he told me.

This middle ground – labelled ‘high value’ by Jahameh – offers much of the perks that passengers received from full-service airlines, including hot meals and beverages, but at the prices being offered by low cost carriers.

The market response have been favourable to date, with a load factor of around 80%, so we expect a lot of people will closely be watching the airline’s performance to check whether the ‘high value’ offering has a long-term future.

Robeel Haq, is the senior group editor of Aviation Business.

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