RAK Airways will launch five destinations in a year

Dubai: Amid recovery of the regional aviation industry, RAK Airways will launch five destinations in a yearwill launch at least five destinations within a year with fares comparable to those of budget carriers, airline officials said on Sunday.

Despite scepticism from analysts, the airline will re-launch after tough economic conditions and shrinking demand forced the airline to halt services in the wake of the financial downturn.

Starting on October 10, the launch destinations are Jeddah and Kozhikode (Calicut), India with one-way fares before tax and surcharges as low as Dh10. At the time of writing, the one-way online fare to Kozhikode was Dh110 before tax and surcharges, on high demand.

Radio 2: Feyaza Khan reports on the relaunch of RAK airways

  

Audio supplied by 99.3 106 Radio 2

Flying two 737-400 Boeing aircraft in a one-class configuration, the airline's service will include in-flight meals and a 30kg allowance for checked baggage.

Officials insist that the carrier is not a budget carrier, but is uniquely positioned below conventional carriers and above low-cost carriers in terms of services and fares.

Bigger plans

The re-launch falls under the bigger plans of His Highness Shaikh Saqr Bin Mohammad Al Qasimi, Member of the Supreme Council and Ruler of Ras Al Khaimah, to increase fourfold the current tourist numbers by 2012 and the number of five-star hotel rooms from 1,400 to 7,500, airline chairman Shaikh Omar Bin Saqr Al Qasimi said at the press conference.

"The time is now right for us to make a spectacular re-entry into the market," the chairman said, quoting 17 per cent air traffic growth for the region.

Omar Jahameh, chief executive of RAK Airways, said future destinations are being considered in the GCC, Levant, Indian subcontinent and Commonwealth of Independent States.

While previous attempts have failed, he said, cost controls and better market conditions would help the airline succeed this time around. "We have an ambitious plan to break even on operating costs in one year," which would require a load factor of 50-60 per cent, he said.

In early 2008 the airline signed an order for four 737-800s and two options at a list price of $300 million. Jahameh said they are negotiating the terms of the contract but do not yet know when they would be exercising their rights to purchase. While demand has somewhat improved, Ras Al Khaimah remains a destination that is not the first option of travellers in the country.

Likely struggle

"With Jeddah, they will find quickly that the likes of Saudi Arabian Airlines and NAS Air have encouragement from the Saudi government so it won't be easy to penetrate or even capture traffic. As for Calicut, there are countless air services there too from an array of airlines and there is no guarantee passengers would pick Ras Al Khaimah ahead of Dubai or Abu Dhabi [or even Muscat for example]," said Saj Ahmad, an aerospace analyst in London at FBE Aerospace.

"The likes of flydubai have become the second biggest traffic generator at Dubai Airport. How RAK can even hope to emulate that at a less busy airport in Ras Al Khaimah is dubious and there is a very real possibility that the airline will struggle all over again," he said.

"They just don't have the market base, efficient enough fleet or capital resources to compete with their Emirati neighbours, much less other state backed entities in other countries," Ahmad added.