Crisis fails to clip wings of new airlines

Taking advantage of lower fuel and aircraft prices, as many as 30 start-up carriers (as of September 2009) are continuing to enter the market this year, according to a report by Centre for Asia Pacific Aviation, or Capa.

It said the capacity reduction by rivals has also helped boost this trend to an extent in some markets.

A case in point is Sharjah-based Air Arabia's new budget venture in Egypt called Air Arabia Egypt, which is expected to begin operations soon. Less than five months after launching a joint venture operation in Morocco, Air Arabia has signed a joint venture agreement with Egypt's Travco Group, a leading tourism and hospitality group, to establish Air Arabia Egypt.

The new budget airline will become the seventh low-cost carrier in the region, after Air Arabia (Sharjah), Jazeera Airways (Kuwait), Sama Airlines (Saudi Arabia), Nasair (Saudi Arabia) and flydubai (Dubai).

In August 2007, when there were four low-cost carriers operating in the Middle East, Capa had predicted in the first edition of its Middle East Aviation Outlook, up to 10 low-cost carriers (both short- and long-haul) that could be operating in the Middle East by 2012.

Further, with an aim to serve destinations in Europe, Africa and the Middle East, contributing to the growth of travel and tourism in Egypt and the wider region, Air Arabia Egypt has yet to decide a launch date, Air Arabia's Chief Executive Officer, Adel Ali, recently told Emirates Business.

While Air Arabia, which owns 40 per cent of the new venture, will be responsible for managing the new airline, Travco owns 50 per cent of the airline and an independent Egyptian investor 10 per cent.

Yet another new airline venture in Egypt would be that of AlMasria, which is planning to launch a private commercial airline, according to the Capa report.

AlMasria Universal Airlines plans to launch service as a private commercial airline in Egypt in 2009, although the carrier has not provided any further clarification of its launch plans, the report stated.

The Cairo-based carrier, which is privately backed by four Egyptian businessmen, was previously targeting a June 2009 launch date, at the same time that Dubai launched its first budget carrier, flydubai.

AlMasria previously stated it aims to capture traffic in the north of Egypt for Haj pilgrimages to Makkah, and also plans services from the Egyptian capital to destinations in Libya, Bahrain, Kuwait and some European countries. The carrier expects a short-term network covering 20 destinations, as per the report.

Fleet wise, however, AlMasria has secured an initial two A320s from BOC Aviation, with the aircraft previously belonging to Kingfisher. The carrier, according to the Capa report, plans to dry-lease the first aircraft for the first three years, with its fleet growing to four aircraft within the next four months. By 2014, the carrier plans to purchase aircraft from Airbus, with a targeted fleet size of 10 aircraft.

The Capa report said AlMasria's aircraft maintenance will be outsourced completely to EgyptAir under a total service agreement, with the airline also training AlMasria flight crew and the technical team. Ground handling will be through EgyptAir, with passenger services undertaken by Egypt Aviation Services and catering by a JV between EgyptAir and LSG Sky Chefs.

Meanwhile, in Dubai the emirate's first budget carrier flydubai launched operations in June this year despite challenging economic conditions with two initial routes to Beirut and Amman.

Just five months into the game, flydubai now boasts a network of six destinations including Beirut, Amman, Damascus, Aleppo, Alexandria and Djibouti (launched earlier this month).

And the airline is steaming ahead with expansion plans, as its CEO, Ghaith Al Ghaith recently said. Flydubai said that the airline will add two more Boeing 737-800 aircraft to its current fleet of four by the end of 2009, to support a network expansion covering eight new destinations by the end of the year, according to a recent Capa report.

It quoted Al Ghaith as saying that the carrier plans to "grow as fast next year as we have done since we launched, and even faster in 2011". Targets include "niche markets where there is no existing competition, including destinations in India, the CIS and Russia".


Global start-ups

According to the Capa report, among the progress line up of 30 start-up carriers, some significant ones include airlines such as Excelsis Airways in the UK, Olympic Air in Greece, Enerjet in Canada, China Joy Air and Tianjin Aviation in China, Japan's Fuji Dream Airlines, Happy Air in Thailand, Malaysia's Silverfly, Nigerian Eagle Airlines and so on.

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