Dubai: Jazeera Airways may launch long-haul flights if it’s not able to buy a controlling stake in Kuwait Airways, chief financial officer Donald Hubbard told Gulf News on Tuesday.
Jazeera Airways, the Kuwait-based low-cost hybrid airline, expressed interest in May this year in acquiring a 35 per cent controlling stake in Kuwait Airways, the country’s national airline. But the Kuwait government has since back-tracked on its plan to sell off all but 20 per cent of the airline. Instead, it has put forward a proposal to retain 75 per cent.
Jazeera Airways hoped to synergies its processes with Kuwait Airways, including operations at Kuwait International and using the Kuwaiti national carrier’s long-haul network to feed its own regional flights.
According to Hubbard, the low-cost hybrid carrier is looking at starting flights to London, Paris and possibly Singapore, if it can no longer purchase a controlling state in Kuwait Airways.
“If they’re not going to be privatised, then we might jump in,” Hubbard said.
Jazeera Airways, which made a 3.2 million Kuwaiti dinar (Dh38.8 million) profit in the first half of the year. It currently operates a fleet of seven Airbus A320s — narrow-body aircraft used for short-haul regional flights.
Direct flights to London, Paris and Singapore would require long-haul aircraft, which Hubbard said could also be used on flights to south Indian cities, such as Kochi, which are currently unfeasible.
Jazeera Airways has not flown to India since closing its Dubai hub in 2009.
“There are still opportunities [on] the sub-continent,” Hubbard said, adding the airline is looking at launching flights with A320s to Pakistan and north India after it adds a new A320 to its fleet somewhere in the near term.
Jazeera Airways plans on operating a fleet of 11 A320s by 2018-2019. After the fleet reaches 15 aircraft, Hubbard said the airline will consider operating a split fleet with Boeing aircraft.
The low-cost carrier believes it can help revitalise Kuwait Airways, which has not turned a profit since the 1990 Iraqi invasion of Kuwait.
However, the Kuwait parliament is yet to approve the government’s plans to retain a 75 per cent stake.
“Unless they come out and categorically say that it’s a ‘no,’ we will still be interested,” Hubbard said.
Jazeera Airways plans to build its own terminal, including valet parking — an oddity for low-cost airlines in Europe but not the Gulf where a hybrid model has seen the introduction of business seats and included baggage allowance.
The terminal construction, built onto the four gates Jazeera Airways is operating from at Kuwait International, will likely start in the first quarter 2016 and take a year to complete at a cost of €20 million (Dh112.67 million), Hubbard said.
On Wednesday, October 13, Jazeera Airways will pay off all of its outstanding debts, following shareholder approval earlier this week to halve its capital in a 22 million dinar share buy-back.
Hubbard also said the airline business will do “much better” this year than in 2014 when the group, which includes other businesses, made a 2.88 million Kuwaiti dinar net loss due to a one-off non-recurring loss. The airline’s average load factor is 69 per cent this year and will likely touch 70 per cent next year, he added.
Jazeera Airways sold off its lucrative aircraft leasing unit earlier this year. Hubbard said the airline business is a lot stronger, contributing between 82 and 83 per cent of profits.
The leasing unit had once contributed half of all profits but this had substantially decreased over time, he said.
