Nevrekar
19th Mar 2008, 05:38
Competition hits turbulence as Emirates announces low-cost lift off
Mar 19, 2008
After years of umming and ahhing, Emirates is to launch a dedicated low-cost airline. As yet, few details are known, save for the standard low-cost concepts: a fleet of single-aisle aircraft flying to destinations up to four and half hours away. It expects to launch within the year, though no idea whether it will fly from Dubai Central or the new World Central being built at Jebel Ali.
To date, only Jazeera Airlines uses Dubai as a base for low-cost operations. Air Arabia, flying out of Sharjah, with 39 destinations and hubs in Morocco and Nepal, will be the most obvious competitor. Through gritted teeth, Air Arabia Chief Executive Adel Ali says he welcomes Emirates' arrival:
"The market is sufficiently big for all of us and it will complement us. I am pleased such an airline has seen our business model as a success and decided to do the same."
The airline will be run as a separate entity within the Emirates Group, though it must benefit from some of Emirates' organisational and buying power. In November, Emirates ordered $23.4 billion of aircraft from Airbus and Boeing, with options for 50 more. The new airline may take up this option. Ghaith Al-Ghaith, executive vice president for commercial operations at Emirates, will be the new carrier's CEO.
With huge numbers of Gulf residents coming from Europe, India and the Philippines, it would make sense for any budget carrier to look beyond GCC destinations. Emirates will face a number of established competitors.
Air Arabia Currently flying to 39 destinations with a fleet of 11 planes (it ordered a further 34 planes from Airbus worth $3.5 billion in November 2007), the market leader in the Gulf. It has opened a secondary hub in Rabat and signed a management deal with Regional Airlines. Has joint venture with Yeti Airlines to operate Fly Yeti out of Kathmandu.
Jazeera Airways The first and only privately owned airline in Kuwait and the Middle East, Jazeera has bubs in Kuwait and Dubai. It has a fleet on six new Airbus A320s and flies to 25 destinations. It carried 600,000 passengers in 2006, and 1.2 million in 2007 - and upped its order for new A320s from 10 to 40 at last year's Paris Air Show. Says it will allow mobile phones on planes next year.
NASair Saudi's first low-cost flyer, currently to 23 mostly-Saudi destinations but plans to add 12 international routes by the end of the year. Has ordered 20 Airbus A-320 single-aisle aircraft for delivery in 2012, and will lease in the meantime. Plans to raise $2bn via IPO later this year.
Spice Jet India's newest, smartest and most affordable low-fare airline, according to the company blurb, Spice Jet already flies to 21 destinations using a fleet on Boeing 737-800s. The company has tied up with Navitaire the world's renowned low-cost support for reservations and revenue management, and KLM for maintenance.
Air Deccan India's biggest and most ambitious low-cost carrier. It had a fleet of 41 planes and flies to 65 destinations, including smaller towns and cities throughout India. In December 2007 the company merged with Kingfisher Airlines, owned by Vijay Mallya, allowing Kingfisher to by-pass a five-year wait on international routes. It is believed that Deccan will fly to the Gulf and S.E. Asia, while Kingfisher will reserve Europe and North America.
Air India Express Already flying into the Gulf and east to Asia, Air India Express is the low-cost subsidiary of state-owned Air India. It has had access to routes but is perhaps not so dynamic as private airlines. A merger between Air India and Indian Airlines will give it greater access to planes. Has plans to expand to Europe and North America.
Mar 19, 2008
After years of umming and ahhing, Emirates is to launch a dedicated low-cost airline. As yet, few details are known, save for the standard low-cost concepts: a fleet of single-aisle aircraft flying to destinations up to four and half hours away. It expects to launch within the year, though no idea whether it will fly from Dubai Central or the new World Central being built at Jebel Ali.
To date, only Jazeera Airlines uses Dubai as a base for low-cost operations. Air Arabia, flying out of Sharjah, with 39 destinations and hubs in Morocco and Nepal, will be the most obvious competitor. Through gritted teeth, Air Arabia Chief Executive Adel Ali says he welcomes Emirates' arrival:
"The market is sufficiently big for all of us and it will complement us. I am pleased such an airline has seen our business model as a success and decided to do the same."
The airline will be run as a separate entity within the Emirates Group, though it must benefit from some of Emirates' organisational and buying power. In November, Emirates ordered $23.4 billion of aircraft from Airbus and Boeing, with options for 50 more. The new airline may take up this option. Ghaith Al-Ghaith, executive vice president for commercial operations at Emirates, will be the new carrier's CEO.
With huge numbers of Gulf residents coming from Europe, India and the Philippines, it would make sense for any budget carrier to look beyond GCC destinations. Emirates will face a number of established competitors.
Air Arabia Currently flying to 39 destinations with a fleet of 11 planes (it ordered a further 34 planes from Airbus worth $3.5 billion in November 2007), the market leader in the Gulf. It has opened a secondary hub in Rabat and signed a management deal with Regional Airlines. Has joint venture with Yeti Airlines to operate Fly Yeti out of Kathmandu.
Jazeera Airways The first and only privately owned airline in Kuwait and the Middle East, Jazeera has bubs in Kuwait and Dubai. It has a fleet on six new Airbus A320s and flies to 25 destinations. It carried 600,000 passengers in 2006, and 1.2 million in 2007 - and upped its order for new A320s from 10 to 40 at last year's Paris Air Show. Says it will allow mobile phones on planes next year.
NASair Saudi's first low-cost flyer, currently to 23 mostly-Saudi destinations but plans to add 12 international routes by the end of the year. Has ordered 20 Airbus A-320 single-aisle aircraft for delivery in 2012, and will lease in the meantime. Plans to raise $2bn via IPO later this year.
Spice Jet India's newest, smartest and most affordable low-fare airline, according to the company blurb, Spice Jet already flies to 21 destinations using a fleet on Boeing 737-800s. The company has tied up with Navitaire the world's renowned low-cost support for reservations and revenue management, and KLM for maintenance.
Air Deccan India's biggest and most ambitious low-cost carrier. It had a fleet of 41 planes and flies to 65 destinations, including smaller towns and cities throughout India. In December 2007 the company merged with Kingfisher Airlines, owned by Vijay Mallya, allowing Kingfisher to by-pass a five-year wait on international routes. It is believed that Deccan will fly to the Gulf and S.E. Asia, while Kingfisher will reserve Europe and North America.
Air India Express Already flying into the Gulf and east to Asia, Air India Express is the low-cost subsidiary of state-owned Air India. It has had access to routes but is perhaps not so dynamic as private airlines. A merger between Air India and Indian Airlines will give it greater access to planes. Has plans to expand to Europe and North America.