Today will go down in the region's history as the day another budget airline took to the skies. flydubai, which started off as an entity within Emirates Group, will now set off as a completely separate budget airline from the group but its ownership remains the same.
The airline will service a different market segment than its parent company, and will be flying out of Terminal 2 at Dubai International Airport.
Last year, the company placed an order for 50 next-generation Boeing 737-800s valued at $4 billion (Dh14.6 billion). It will be receiving the delivery of its new planes over the next seven years.
Last month, the airline took delivery of its first aircraft and will be flying with it to Beirut today. It will also be flying to Damascus, Alexandria and Amman.
Though international seat-load factors have fallen drastically in the past months due to the economic downturn - expected to cost the industry about $2.5 billion in losses after a $35 billion fall in revenues this year - the Arab region is maintaining growth, albeit at subdued levels.
The short term plans of the airline include increasing its destinations to 16 this year with the sub-continent and GCC playing a larger role.
Robert Ziegler, vice-president and partner for Middle East at AT Kearney, a global management consultancy firm, said the airline's impact on the market will be limited for now. He, however, expects it to grow as it puts more capacity on the market.
"It's a good market to be in for low-cost airlines, to be competing with the full-service carriers. Overall, it depends on how aggressively they are going to scale up," he said, on flydubai, adding that it would have to be careful to avoid competing with its parent company's flagship, Emirates.
Gaith Al Gaith, flydubai chief executive, had earlier on said that the airline would be competing with other low-cost, traditional airlines within UAE and the region.
Meanwhile, Marwan Boodai, chairman of Jazeera Airways, believes that the market has enough demand for flydubai to not pose as a major competitor and that the new airline will target a different segment.
"We are more focused on the middle-class income, on families and business travel. We feel that business travellers will be increasingly choosing Jazeera, rather than the high end of the market," he said.
Closer to home, flydubai now poses as the first direct competitor within the UAE to Air Arabia, the region's first low cost carrier.
Adel Ali, chief executive of Air Arabia said that another low-cost carrier, would hopefully make people understand that low-cost was a good thing.
"The market base will just increase. If you bring a low cost airline, [it] does not mean it will just take passengers from another low-cost airline. There are hundreds of conventional airlines around this region. All of them have very big economy cabins," he said.
He added that low cost airlines normally provided a better economy cabin than conventional airlines.
"If there is a threat from a low-cost airline, it will be to conventional airlines and not to each other," he said.
The launching of flydubai during a market slowdown, represents its optimistic outlook on the future.
"If you're starting up something right now... in this part of the cycle, it's because you're betting that in the future the cycle will go up again and the kind of volumes that we saw last year and the years before will come back," Zeigler said.
"You're making an investment into the next boom cycle."
FACT FILE:
- flydubai baggage allowance is 10kg. Excess baggage is charged at the rate of Dh40 for an additional 32kg. The second additional 32kg will cost Dh100.
- Air Arabia baggage allowance is 20 to 30kgs, depending on the destination. Within the GCC region, the allowance is 25kgs except to Jeddah. All other flights except Almaty, the allowance is 30kgs. Excess baggage starts from Dh10 to Dh50 while flying directly from Sharjah.
- Nas Air baggage allowance for domestic flights is 20 kgs while that for international is 30kgs. Excess baggage costs 10 riyals per kilogramme on domestic flights and 25 riyals for international flights.
- Jazeera Airways baggage allowance is 30kg and to Khartoum, its 40kg. For easy/light/freedom, it is 20kg and for flights to Khartoum, it is 30kg. Excess baggage is charged at two or 2.5 Kuwait Dinar per kilogramme.
