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Sun 1 Jul 2012 12:22 PM

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Kuwait’s Jazeera Airways targets Egypt

Airline captured 35 percent market share on Kuwait-Alexandria route, stats show

Kuwait’s Jazeera Airways targets Egypt
Kuwaits low-cost carrier Jazeera Airways has moved to capture a bigger share of the Egyptian market as its performance on routes within the Gulf continues to remain low.

Kuwait's low-cost carrier Jazeera Airways has moved to capture a bigger share of the Egyptian market as its performance on routes within Gulf continues to remain low, according to the results of its latest performance indicators.

Data from Kuwait's Directorate General for Civil Aviation (DGCA) showed the airline was the leading airline between Kuwait and the five Egyptian cities it served.

Results for April showed the airline captured a 35 percent market share on the Kuwait-Alexandria route, a 47 percent market share on the Kuwait-Assiut route, a 64 percent on the Kuwait-Luxor route, a 56 percent market share on the Kuwait-Sharm El Sheikh route, and 39 percent market share on the Kuwait-Sohag route.

The airline also increases its market share on the Kuwait-Cairo route to 26 percent, an all-time high since it first launched the route on May 18, 2011.

“The focus on low yield, higher traffic volume to Egyptian cities has helped Jazeera Airways,” said Saj Ahmad, chief analyst at StrategicAero Research. “But relying on that sort of revenue will not be conducive to long term sustainability, especially as Egypt is likely to focus on building its core airline businesses in the wake of the new presidency to tackle unemployment.”

While being the largest airline serving the Middle East out of Kuwait, the DGCA data showed the carrier had much lower rates on some regional Gulf routes, operating a 12 percent market share on the Kuwait-Bahrain route and a 16 percent share on the Kuwait-Dubai route.

Ahmad put the low market share down to the loss of Dubai as its second hub and competition from UAE-based rivals. “On the Dubai flights, the airline was forced out of the city as this was its second hub as the [Dubai] Government set up flydubai, whose own growth is utterly relentless and has captured a huge chunk of every market they operate in, especially Dubai-Kuwait,” he said.

“By giving up slots, particularly in Dubai, that's why they have just 16 percent market share - and it’s likely they do not have the money to buy any new slots either. If they stay on their present course, they will lose even more market share, especially since Emirates announced in February that they'd increase flights to Kuwait, so Jazeera Airways and Kuwait Airways will come under more pressure,” he added.

On a more positive note, figures from FlightStats, the global flight and trip tracker, found Jazeera Airways was the leader in on-time performance in the Middle and North Africa, scoring an average 96.52 percent on-time performance rating in April.

Last year, the carrier returned to profit for the first time in three years, as the airline restructured its business. Net income was KWD10.6m (US$38m) last year after a loss of KD2.8m a year earlier, the low-cost airline said in a statement in March. The airline posted losses in 2010 and 2009, according to the Bloomberg data.

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