Participants at 'Low Cost Airlines World Mena 2009'

Queen Alia International Airport (QAIA), part of the Airport International Group, Jordan, has announced plans to invest $750 million in redevelopment of the airport and build state-of-the-art 86,000 sq m passenger terminal.

The announcement from Curtis Grad, CEO of Airport International Group – QAIA, came on the last day of 'The Low Cost Airlines World MENA 2009' on Tuesday.

'We expect Phase I to be ready by early 2012. It will have a capacity to handle 9 million passengers. The Phase II will be able to handle additional 12 million passengers. We are looking at inbound traffic from Abu Dhabi, Al Ain, Dubai and Sharjah and other parts of GCC markets to link up with QAIA and benefit from it,' Grad said.

'There are already six Low Cost Carriers (LCCs) - Air Arabia, Jazeera Airways, Bahrain Air, Sama Airlines, Nas Air and Fly Dubai - that have a total of 80 arrivals and departures a week to Amman, Jordan,' he noted.

QAIA, Grad said, had witnessed a 15 per cent jump in flight volumes during the year 'in addition to a 10 per cent increase in passenger numbers (in peak summer) and a four per cent increase in passenger numbers till date.'

In his presentation on the conluding day, Tim Coombs, managing director, Aviation Economics said the barriers to start LCC will remain low considering that an airline operating 5 A320 aircraft can be set up with capital of just $10 million.

“The LCC model is well understood, easily copied and globally transferable today. And Hedge Funds / Private Equity industry has surplus funds of US$150 billion. It is easy to start LCC even today,” he remarked. 

According to Sherif Attia, CEO of Air Cairo, 2008 was very encouraging compared to the previous year. “The increase in number of flights was up by 17 per cent, passenger load was up by 21 per cent, and while Egyptian carriers reaped higher business (19.7 per cent), the foreign carriers also had a good time with business up by 16.2 per cent.”

Shashank Nigam, founder & CEO, SimpliFlying, said, “Social Media (Facebook, Twitter, YouTube etc) will be the next driving force for LCCs. If Dell can sell $3 million worth of products in a short span of time why can’t LCCs take advantage of social media? It is entirely possible to clear distressed inventory on Twitter or Facebook.”
 
‘Connectivity Evangelist’ Air AsiaX CEO Azran Osman-Rani made a successful pitch to the audience for the need of ‘Low Cost, Long Haul’.

Air AsiaX said it was set to start flights to Abu Dhabi, marking its first foray into the Middle East. Azran also confirmed that the airline has ordered 10 A350 aircraft recently.

Stefan Pichler, CEO of Jazeera Airways who has been into the job barely four months, said he was very confident about the region’s potential.

'The worst seems to be over and I can fairly say that second half of 2009 will be much better than the first half for Jazeera Airways,' he noted.

Kevin Steele, chief commercial officer, Sama Airlines, said that 'Kerala (India) -Saudi Arabia is the largest point-to-point market in the region and Egypt-Saudi Arabia is the largest intra-Middle East point-to-point market. “My question to any LCC is: Where will you put your investments?”

Maher Koubaa, VP, Middle East and Africa, Sabre Airline Solutions said: “Beyond oil prices, customer loyalty and retention, revenue and yield and, network planning and scheduling are the most frequently identified as issues that have an impact on airline from a cost and operations standpoint.”

Walter Prenzler, CEO, Nas Air said that there are three LCCs in Saudi Arabia but still opportunities exist for new players.

 “Apart from the strong home market, Saudi Arabia has geographical location advantage, coupled with huge young local population that has restricted public transportation. In addition, LCCs can leverage religious traffic (Hajj – Umrah) and the labor traffic,' he added.-TradeArabia News Service