Business | Aviation
Low-cost airlines call for end to airport service monopolies
Gulf-based low-cost carriers on Wednesday called for an end to airport service monopolies in the region as they seek to lower operating expenses amid soaring fuel costs.
- By Shakir Husain, Staff Reporter
- Published: 00:08 June 5, 2008
- Image Credit: Karl Jeffs/Gulf News
- Visitors at the Airport Show. Economic growth and demographics in the Middle East support the budget airline sector's growth.
Dubai: Gulf-based low-cost carriers on Wednesday called for an end to airport service monopolies in the region as they seek to lower operating expenses amid soaring fuel costs.
The chief executives of Sharjah-based Air Arabia and Saudi airline Sama said budget airlines have to pay high bills for airport services such as catering and fuel because they do not have a chance to pick a service provider.
These airlines would like to operate out of dedicated low-cost airports rather than 'five-star' airports serving both full-service airlines and low-cost ones, Air Arabia's Adel Ali said at Airport Show in Dubai.
"We need low-cost airports, not five-star airports that invest a lot in design than technology," he said.
Ali said low-cost carriers have become a key part of the region's air travel industry and the market's growth potential will be lost if facilities to support budget airlines are not developed.
Sama CEO Andrew Cowen also wants airports to avoid "over-investment" as it leads to costly airport charges from users.
He criticised "a general lack of best practice" in providing ground services as mostly there is a single company in control of businesses at regional airports.
Very costly
"These services can be very costly and they tend to be poor," Cowen told Gulf News.
On the general cost of travel, the Sama chief said passengers in the Gulf pay five times more than their counterparts in other regions for every kilometre they fly.
With oil prices at record high, spending on jet fuel now accounts for 30 to 40 per cent of expenses for an airline.
Despite these challenges, both Ali and Cowen see economic growth and demographics in the Middle East supporting the budget airline sector's growth.
Ali said the number of people among middle-class communities who would opt for a budget airline has risen significantly.
"The low-cost phenom-enon is spreading," he said.
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