REGIONAL AIRLINES

Kuwait 2017 | TRANSPORT & LOGISTICS | B2B

With air travel expected to increase in the near future, airlines target new destinations and services for travellers.

Omar Al Banna
OMAR AL BANNA
Country Manager Kuwait
Emirates
Hussein Al Hasaseen
HUSSEIN AL HASASEEN
Area Manager Kuwait
Royal Jordanian

What developments and trends have you seen in the industry in recent years?

Omar Al Banna We have a great mix of business and leisure travelers going in each direction. That said, we seek to grow outside of Kuwait. We travel to 154 destinations and serve all of them from Kuwait. However, there are some destinations in Europe and the Far East that are extremely popular from Kuwait. North and South America are increasingly popular as well. For the time being, we operate seven flights between Kuwait and Dubai, six with the Boeing 777, and one with the Airbus 380, the largest passenger aircraft in the world. In addition, we schedule additional flights for holiday periods, such as Eid, for which we have a cooperative relationship with the civil aviation and airport authorities.

Hussein Al Hasaseen The demand for air travel continues to grow. The largest growth markets in the near and medium term are expected to be on the African continent and India. Things have changed in the past year. The drop in fuel prices adversely influenced the travel market in Kuwait, and the government started to ration its resources. Right now the competition is stiff; we used to have two competitors in 2015 but now there are four. Looking at the concept of services that the other airlines provide, it can be seen that as a full-service airline, we are competing with three low-cost carriers, which have caused prices in the market to drop. In fact, prices this year have fallen by some 35% compared to last year. We are constantly reviewing our strategy; at the same time, we have to function directly and indirectly, as the average prices of our competitors are lower than ours. We cannot match all our competitors as we are a full-service airline. In addition, our taxes in Kuwait are USD186 and we work based on a margin of USD216 inclusive all taxes. This means that the average fare will drop to USD33, with taxes of USD216. Last year we were selling tickets at a minimum of USD325.

What are your ambitions for Kuwait?

OAB Our ambition is to focus on our growth and to try to make the best of the opportunities that work for the business. We are optimistic about the future; however, given the intensity of the competitive environment and the economic and geopolitical forces currently at play, we need to remain smart and ahead of the game. Our ambition for Kuwait is to focus on connecting Kuwaiti travelers to our worldwide network and providing unbeatable value for money and unmatched levels of service.

HAH Royal Jordanian Airlines is committed to providing the highest quality of customer care and services to our passengers in Kuwait. If fuel prices continue to decline, we will see more challenges in Kuwait. It will be tough for full-service airlines, providing low-cost businesses an opportunity to boom in that period. Low-cost airlines offer the cheapest fares in the market. Relying on this, Royal Jordanian will try its best to offer the lowest fare available for its flights based on the date, route, and class of service requested.

What partnerships do you seek to form outside of air travel?

OAB In Kuwait, we have had a longstanding partnership with ABK, through co-branded credit and prepaid credit cards. We also have the ABK Skywards Miles program, and our co-branded program offers exclusive benefits for our premium customers and delivers rewards and a regular stream of benefits, features, and services. Emirates Skywards also has partnerships with other airlines through joint frequent-flyer programs, car rental companies, global hotel chains, and retailers in the UAE and around the world. We are continually on the lookout to partner with other interesting entities to offer more options and rewards for our travelers.

How important is the Kuwait branch for Royal Jordanian compared to others in the region?

HAH Royal Jordanian Airline started operations in 1963 with two Handley Page Dart Heralds and a Douglas DC-7 aircraft, serving Kuwait City, Beirut, and Cairo from Amman. Kuwait is a constitutional monarchy with a high-income economy backed by the world's sixth-largest oil reserves. The Kuwaiti dinar is the highest valued currency in the world. According to the World Bank, the country has the fourth-highest per capita income in the world. In addition, Kuwait is the second-richest GCC country per capita after Qatar. Petroleum accounts for half of GDP and 90% of government income. Significantly, Royal Jordanian Airlines launched flights to a number of high-profile destinations including Kuwait, which has been an essential contributor to the airline revenue.