TBY talks to two CEOs in the air transport sector on important markets, the Dubai Air Show, and oil prices.
What have been the airline’s milestones?
GHAITH AL GHAITH Since the government announced in March 2008 that it was to launch a low-cost carrier there have been a number of milestones. In June 2008, flydubai announced a historic order for 50 Boeing 737-800 NG aircraft at the Farnborough Airshow. To date, we have received 21, with the rest due to be delivered before the end of 2016. Additionally, the aircraft we received in December 2011 was the 7,000th 737 Boeing has delivered, which was a very exciting time for us, and it features a special one-off livery. In terms of operations, June 1, 2009 was a historic day for flydubai, as the vision became reality when our first commercial flight took off to Beirut. In the first 12 months of operations we carried more than 750,000 passengers and expanded our operational route network to 16 destinations. To date, we now have more than 45 operational destinations spanning 28 countries across the GCC, the Middle East, Africa, Asia, the Asian subcontinent, and Central and Eastern Europe. Another significant development includes taking a bold step to invest $20 million to bring all of our engineering and maintenance facilities in house in April 2011. This was then followed by the launch of flydubai Cargo on January 1, 2012, making the transportation of goods across the region via Dubai simple, accessible, and affordable.
SHANE JeFfree O’HARE Royal Jet is eight years old, and it was formed by Presidential Flight in Abu Dhabi. It is 50% owned by Presidential Flight and 50% by Abu Dhabi Aviation, which is a publicly listed, government-majority owned company. The operation is fully commercial, and has been profitable since the second year of its operation. Presidential Flight currently operates a number of businesses, including as a Fixed-Base Operator (FSB) and manages a VIP terminal operation at Abu Dhabi International Airport. It operates about 350 flights a month in addition to our own movements. It provides a very important service for VIP aircraft visiting the capital of Abu Dhabi. We operate an aircraft management business that handles private jet aircraft on behalf of our network of individual clients as well as corporate clients. We operate a brokerage business that brokers third-party charters for our clients when our own aircraft cannot service that particular business. We also have a medical evacuation service, which performs on average one mission every day, and we have 60 aircraft mainly used for those operations. This is a very special part of our business. The main part of our business is charter, and we have 11 aircraft in our fleet.
What new markets are significant for you?
GG India is a very important market for flydubai. Not only is there a large number of Indian expatriates living in the UAE, the majority of whom visit their home nation regularly, but the UAE is also a popular tourist destination for Indians, and therefore there is a lot of traffic between our two countries. Moreover, flydubai is keen to increase its network in India, and we are working with the relevant authorities to make this happen. Elsewhere, in 2012, we have launched operations to four new cities, Baghdad and Najaf in Iraq, Taif in Saudi Arabia, and the capital of the Kyrgyz Republic, Bishkek, and there will be more to come. Bishkek was the 50th destination we started flights to, which is an excellent achievement for us, having launched operations less than three years ago. We have marked many milestones and are delighted to have reached this point.
SO We recently opened a hub in Saudi Arabia, which is a larger market than the UAE. We are also generating more business these days in Oman, Kuwait, and Jordan, and in Europe as well. We have set up special relationships in some of these markets, where we are building our market share. Our strategic plan is growth in the Gulf and Middle East region because that is where our main hubs are. There will be significant growth in this area for the foreseeable future. We are seeing now that the UAE growth is starting to bounce back after the global recession, and Abu Dhabi will see around 3% growth in 2012. The current market conditions are very buoyant for us. The Middle East is going to remain very important. We also are seeing the reconstruction of Iraq with many corporations now going into that country to assist with its redevelopment. That is generating a much higher level of growth than we were expecting. Afghanistan is something that is also on our radar, and it is a country to which we fly regularly. If some of the countries settle down over the next 12 months, we will see more stability coming into the growth curve.
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