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13 April 2024

Low-cost airlines flap wings to rival national carriers

The future of low-cost airlines seen stronger, brighter and more competitive. (SUPPLIED)

By Nissar Hoath

Low-cost airlines are fast growing in the region, forcing national carriers to opt for similar services and business operations, a top official of Bahrain Air, which was established in February this year, said.

Managing Director Ibrahim Abdullah Al Hamer told Emirates Business in an interview, Bahrain Air is set to become one of the leading low-cost airlines in the Middle East with its network of destinations that already spread across the region and India, and plans to fly into more Asian and African countries, as well as beyond the two regions.

He said he sees the airline growing fast despite the global economic turbulences.

Al Hamer said: "There are lots of turbulences in the global economy. It suggests the purchasing power is unfortunately getting weaker and weaker. And the people who would like to travel will look for the most attractive and affordable rates in the market. So we see the future of the low-cost airlines stronger and brighter and more competitive.

"The region is thirsty for such things (low-cost airlines). The proof is that we in Bahrain Air started with a load factor of 20 per cent, and now we are 60 per cent and that only within eight months. This is a good indication for low-cost airlines."

Al Hamer said the success of business lies behind cost control, strong and professional team and economical services to customers.

"As time passes, the concept of low-cost airlines will be more acceptable, not only in the minds and hearts of the people, but also at the government level," he said.

About the airline expansion plans and budgetary plans, he said the paid up capital was BD9 million (Dh90m) when launched, but later the company decided to increase the capital to BD20m.

According to Al Hamer, the airline, which is operating on leased aircraft, is also buying four new A320 Airbus aircraft. "We have already signed the letter of intent with Airbus. The intention is to take some of this money, 15 per cent, to pay for the aircraft. The remaining cost of the aircraft will be financed by banks," he said.

The airline has currently two A320 leased aircraft in its fleet and will be getting three more leased aircraft by April 2009.

Al Hamer said in October 2009, Bahrain Air will have six aircraft, all leased.

"The delivery of our own aircraft will start in the beginning of 2011. We have made four firm orders and two optional orders. If we confirm the two, the order for our own aircraft will be six. Right now we are not in a hurry to confirm the optional ones, but once the market is stable, and we are financially doing well with the airline doing good business, we will definitely go for the two as well. In the beginning of 2011, we will have eight aircraft, and in 2012, we will have a total of 10 aircraft in our fleet.

Referring to the IT network, he said the airline currently touches nine destinations from its Bahrain base, and by April next year the network of destination will be increased to 21.

About expanding to Pakistan, he said the airline has already applied for traffic rights to Karachi, Lahore and Islamabad.

"In fact as we speak now, our appointed person in charge in Pakistan is following up with the authorities there, and hopefully we will get the traffic rights very soon."