Dubai: A lack of secondary airports in the Gulf presents a challenge for low-cost carriers, according to the Alpen Capital report. It states that budget carriers are being forced to operate out of the main airports, which places them in direct competition with a number of flagship full-service carriers.
Sharjah’s Air Arabia is currently the only full-scale low-cost carrier in the region. Others such as flydubai, Saudi Arabia’s flynas and Kuwait’s Jazeera Airways operate hybrid models that may feature business-class, meals and luggage.
However, most of them have been able to turn a profit under the current operating conditions. This begs the question as to how important it is for secondary airports to be developed in the region.
New business model
Earlier this week flydubai reported a Dh222.8 million profit for 2013, up 47 per cent on the previous year. Air Arabia reported a 2 per cent profit increase to Dh435 million and Jazeera Airways sailed through a 11.4 per cent gain to a Dh268.8 million profit. However, flynas has not returned a profit since it was established in 2007.
Late last year it launched a new business model, including changing the name from Nasair, and introducing business-class and long-haul routes in a bid for turnaround.
The Alpen report states that most of the region’s airports are undergoing significant expansion to accommodate growth in cargo and passenger traffic. It does not mention that some of these airports, such as Al Maktoum International at Dubai World Central, will have dedicated low-cost carrier terminals.
