Low-cost sector picking up pace in the Middle East

posted on 20th August 2019
Low-cost sector picking up pace in the Middle East

The Middle East has for the last decade and a half been dominated by the big three: Emirates, Etihad Airways and Qatar Airways but low-cost carriers (LCC) are beginning to make their mark and expand across the region

Middle Eastern carriers posted an 8.1 per cent demand increase in June compared to the same month last year, according to the International Air Transport Association (IATA).

This was 0.6 per cent up on the growth in May and was largely driven by the developing low-cost airline market, although full-service carriers continue to expand their offerings in the region.

The likes of Flynas, flyadeal, Air Arabia, Jazeera Airways are spreading their wings, while the likes of Oman Air and Gulf Air are also growing their network in a sustainable fashion, adding to the ever-growing big three of Emirates, Qatar Airways and Etihad Airways.

One particularly interesting recent market move is the announcement by Kuwait low-cost carrier (LCC) Jazeera Airways of its first low-cost long-haul route, from Kuwait International Airport to London Gatwick Airport.

The airline will start a daily Airbus A320neo route from 27 October this year. This will be the first new service from the UK to Kuwait in 55 years.

Marvan Boodai, Chairman, Jazeera Airways said the carrier is building a “great reputation” in the Middle East in the low-cost airline sector, offering a “strong alternative” to the legacy airlines.

LOW-COST BOOM

Air Arabia is another LCC in the region which is taking off and has added a new route from Sharjah to Bishkek in Kyrgyzstan.

The new flight begun operating four times a week from 4 July this year, as the first service departed Sharjah International Airport and arrived at Manas International Airport in Bishkek.

Air Arabia is a Middle East and North African LCC, and now serves over 170 international and domestic routes from its hubs in the UAE, Morocco and Egypt.

One of the region’s earliest LCCs is Saudi Arabian carrier, flynas. The low fare airline was the Saudi Kingdom’s first budget offering.

Flynas is targeting India in its latest route development move, as it has launched a new route from Riyadh to Delhi to meet the growing demand by passengers. India is the fourth highest number of travellers in Saudi Arabia with around 3.3 million passengers.

As of 1 July, there will be five flights per week connecting Riyadh and Delhi and starting October there will be daily flights. The carrier has already increased its flights between Riyadh and Hyderabad from two to four weekly flights.

India is not the only focus though, as part of flynas’ global expansion strategy, as it has added five new destinations this summer: Sarajevo, Vienna, Batumi, Tbilisi and Baku.

Another emerging LCC in Saudi Arabia is flyadeal, the low-cost arm of Saudi Arabian Airlines Corporation, which is investing heavily in its fleet to fuel network development plans. The carrier has ordered 30 Airbus A320neo aircraft and options for a further 20 A320neo with deliveries starting in 2021.

The move has been made in response to continuing growth in passenger demand across domestic, regional and international routes. It will give the LCC a wealth of new route development options and is one to watch for over the next few years.

OMAN AND BAHRAIN EXPANSION

Emirates, Qatar Airways, Etihad and Saudi Arabian Airlines have dominated the Middle East, but this is changing, as competition grows and the rapid development of the low-cost sector.

Other national carriers are also expanding, although it seems they are taking somewhat of a more measured and sustainable approach.

Oman Air, the home airline of the Sultanate of Oman, has commenced its new daily direct service between Greece and Oman, with the first flight departing Muscat International Airport to Athens International Airport on 1 June 2019.

Abdulaziz Al Raisi, Chief Executive Officer, Oman Air, said: “Since we announced this route last year, we have seen strong interest to this destination, both from the travel trade community and leisure travellers.

“We expect this daily service connecting Muscat with Athens to further stimulate economic, trade and business relations between our two countries. Apart from strengthening and opening up new business opportunities between Greece and Oman, our flights will also act as a catalyst in driving the expansion of Greek tourists to our beautiful country, Oman.”

The new service between Muscat and Athens is the airline’s 54th destination and second route launched this year after Alexandria, Egypt and is part of Oman Air’s fleet and network expansion programme, which will see the airline operate up to 70 aircraft to around 60 destinations by 2022.

Meanwhile, over in Bahrain, Gulf Air, the national carrier of the Kingdom of Bahrain, has welcomed a third Airbus A320neo, which on 26 October will begin operating the airline’s newest destination – Male in the Maldives.

This delivery is part of a major fleet development project, which will see the airline receive a total of 12 Airbus A320neo aircraft by the end of 2023. Gulf Air will operate five weekly non-stop flights from Bahrain International Airport.

Gulf Air also increased its direct Delhi service from two to three daily flights starting from 9 July, bringing the number of weekly flights it operates to India to 75 weekly flights and eight destinations: Mumbai, Delhi, Chennai, Thiruvananthapuram, Cochin, Hyderabad, Calicut and Bangalore.

Krešimir Kučko, Chief Executive Officer, Gulf Air, said the move is to satisfy the high demand to and from India and cater to passengers’ needs across the Gulf Air network.

Development of the Middle East LCC sector has been slower than other regions but is now picking up pace and the effect of this expansion over the next few years will be interesting, especially as to how it impacts the big three of Emirates, Qatar Airways and Etihad. The question will be whether there is enough room for everybody.