Dubai: UAE carrier RAK Airways has not collapsed and will resume flights at a future date after a restructuing process despite the sudden the announcement on Tuesday suspending all operations from January 1, a Ras Al Khaimah government spokesperson told Gulf News.
On Tuesday, the airline stated that “the board of directors took the decision today to suspend the operations until further notice. We believe this decision is in the best interest of the airline and its shareholders. We will take this time to re-evaluate the best options available for RAK Airways’ future as well as those that fit the industry requirements of the emirate of Ras Al Khaimah.”
John Strickland, Director of UK-based aviation advisory JLS Consulting, told Gulf news that the airline has likely struggled in the shadow of the larger local players.
“It does not have the breadth of network or market profile of Emirates nor the clarity of the low-cost models successfully pursued by Air Arabia and flydubai,” he stated.
Will Horton, Senior Analyst at CAPA-Centre for Aviation, told Gulf News that the catchment area of Ras Al Khaimah is limited. “It’s not Dubai and does not have the proximity Air Arabia has in Sharjah that can often make it an alternative hub,” he stated.
Uncertainty for staff
The sudden announcement creates a level of uncertainty for non-Gulf Cooperation Council (GCC) national employees who, under UAE labour law, are dependent on their sponsor to live in the country.
The RAK government spokesperson said the airline “sympathises with all its employees … [and that they] will be offered full compensation and remuneration in accordance with the UAE labour law.” The spokesperson added that the airline would do whatever is necessary to help employees, including “allowing them to keep their visas for the immediate future and will assist them in finding new employment”.
Affected passengers, however, will be re-booked on alternative airlines or provided with refunds.
It’s unclear what will happen with the airlines fleet of two Airbus A320-200 planes, which are leased. But unlike other UAE carriers RAK Airways does not have any aircraft on order.
Saif Mohammed Al Suwaidi, Director General of the UAE General Civil Aviation Authority, told Gulf News that the self-imposed suspension is related to the airline’s commercial operations, not safety or security.
“They are restructuring their business model. Hopefully we will see them in the air very soon,” he said.
RAK Airways will maintain its UAE-issued aviation licence as long as the suspension is only for a short period.“If they suspend their operations for [a] long time then of course we need to go through the whole process of certification. The [indefinite] suspension is not clear so far so we don’t know how long they will take to resume. Meanwhile, Ras Al Khaimah airport will not be affected by the airline’s closure. The office of Mohammad Qazi, Acting Chief Executive Officer, told Gulf News that “operations will run as per normal with cargo and charter flights using the airport”.