Saudi low-cost carrier NASair said on Thursday it plans to open 12 international routes in 2008 in a bid to break even by the end of this year and will lease at least five aircraft this year to meet expansion.
The airline, one of two budget carriers in the kingdom, plans to invest "several hundred million dollars" to lease planes and expand ahead of receiving its first batch of 20 Airbus A-320 single-aisle aircraft in 2012, chief executive Ed Winter told reporters in Dubai on Thursday.
"We want to expand internationally as rapidly as we can," Winter said after the airline opened its first international route to Sharjah. "I'd like to see this year another 12 destinations... we're hoping to fly to Pakistan soon," he said.
The airline is also looking to begin flights to India, Egypt, Sudan, Abu Dhabi, Jordan and Syria, Winter said.
Oil prices have risen five-fold during the last six years, spurring economies of the Gulf, the world's biggest oil-exporting region.
That has attracted workers from around the world, especially South Asia, the Middle East and the Philippines, creating opportunities for low-cost carriers to tap into.
Winter said fuel accounted for about 30 per cent of the airline's costs since it began operating in February 2007 and coupled with the Saudi government still imposing a fare cap and giving "huge" fuel subsidies to former monopoly carrier Saudi Arabian Airlines, it made it "impossible" to make money.
"If I filled every seat at the fare cap, I would still lose money," said Winter, who was previously chief operating officer at British budget carrier easyjet.
NASair is owned by Saudi-based National Air Services (NAS), which also operates a luxury airline Al Khayala and a private aviation service that rents and offers part ownerships of jets in the Gulf Arab region.
Kingdom Holding, controlled by Saudi billionaire Prince Alwaleed bin Talal, bought a nine per cent stake in the firm in November.
NAS President said in November it planned to sell 30 per cent of its shares in an initial public offering (IPO) in 2008 valuing the company at about $2 billion to help finance aircraft purchases.
Winter said NASair would not raise any funds until the IPO, which is schedule for the end of the year. A financial adviser has still to be appointed, he said.
The airline, which flies to 21 destinations, plans to lease three Embraer planes to serve smaller routes by May and more A-320s throughout 2008 and in early 2009, Winter said.
NAS confirmed a deal to buy 20 A320s with an option for 18 more in a deal worth about $2.4 billion. (Reuters)
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