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41 AIR TRANSPORT LOW-COST CARRIERS T he first Flydubai service offering business class took off for the Ukrainian capital Kiev on October 8, sporting 12 premium seats finished in Italian leather and with a generous seat pitch of 42 inches. By the end of 2013, the number of destinations benefiting from the two-cabin configuration will have risen to 27. Several of the routes earmarked for an upgrade – notably the Kyrgyz capital Bishkek, Donetsk in Ukraine, and Juba in South Sudan – are not currently served by a business class operator. Although premium cabins may seem anathema to the low-cost model, chief executive Ghaith Al Ghaith said unique rules apply to the UAE. “Dubai is a business capital not just for the UAE, but for the world,” he explained. “Out of the 66 destinations that we have already launched, or announced for this year, about 44 are not properly served by airlines with business class products. So we felt that there was a big gap.” Since beginning operations in June 2009, Flydubai has rapidly expanded to become the Gulf’s most recognisable low-cost carrier. Its fleet of 31 Boeing 737-800s is comparable in size to Sharjah- based rival Air Arabia. Two smaller operators – Kuwait’s Jazeera Airways and Saudi Arabia’s Nas Air – have also adopted the low-cost model in a region still dominated by full-service airlines. Flydubai was always going to “do things a little bit different”, in Al Ghaith’s words. It was set up by the Dubai Government with the aim of complementing sister Flydubai took an unexpected turn in June when it unveiled a new business class product. Chief executive Ghaith Al Ghaith tells Martin Rivers why the low-cost carrier is going down the premium path. Flydubai adds a touch of class Continued on Page 42 Ghaith Al Ghaith: Flydubai was always going to “do things a little bit different”.

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Technology moves quickly, and at Fokker Services it is our policy to stay ahead of the game. We design and launch more than 300 aircraft modifications every year, believing that even an already functioning product can be improved on. In recent years Apple has captured the hearts of the consumer with their innovative thinking.

Combined with the history and experience at Fokker, the development of such an innovative yet simple solution felt like a natural progression. Airline operators today are under a lot of pressure to meet growing demands. Products must be efficient, safe, cost effective, user and environmentally friendly; The EFB solution for iPad®

application is ticking all the boxes.

The EFB solution for iPad® is EASA certified (Class 2 Type B) and requires no expensive ICT infrastructure. Easy installation ensures aircraft can be converted with very limited downtime at a cost that is incomparable to anything else on the market. An added benefit of the application is the availability of unlimited nav chart publications; eliminating the need for paper navigation charts on board.

The EFB solution for iPad® application is supported by the three main nav charts suppliers Navtech, Lido and Jeppesen and is available for immediate use on all Fokker, Bombardier, Airbus and Boeing aircraft.

For more information, contact Fokker Services at +31 (0)88 628 00 00, visit www.fokkerservices.com or send us an email: [email protected]

For Continued Competitive Operation.

Note: iPad® is a trademark of Apple, Inc.,registered in the US and other countries.

Moving ahead with your iPad®!

full page 1 29/10/13 5:44 pm Page 1

41

AIR TRANSPORT LOW-COST CARRIERS

The first Flydubai service offering businessclass took off for the Ukrainian capital Kievon October 8, sporting 12 premium seats

finished in Italian leather and with a generous seatpitch of 42 inches.

By the end of 2013, the number of destinationsbenefiting from the two-cabin configuration willhave risen to 27.

Several of the routes earmarked for an upgrade –notably the Kyrgyz capital Bishkek, Donetsk inUkraine, and Juba in South Sudan – are notcurrently served by a business class operator.

Although premium cabins may seem anathema tothe low-cost model, chief executive Ghaith AlGhaith said unique rules apply to the UAE.

“Dubai is a business capital not just for the UAE,but for the world,” he explained. “Out of the 66

destinations that we have already launched, orannounced for this year, about 44 are not properlyserved by airlines with business class products. Sowe felt that there was a big gap.”

Since beginning operations in June 2009,Flydubai has rapidly expanded to become the Gulf’smost recognisable low-cost carrier. Its fleet of 31Boeing 737-800s is comparable in size to Sharjah-based rival Air Arabia.

Two smaller operators – Kuwait’s JazeeraAirways and Saudi Arabia’s Nas Air – have alsoadopted the low-cost model in a region stilldominated by full-service airlines.

Flydubai was always going to “do things a little bitdifferent”, in Al Ghaith’s words. It wasset up by the Dubai Government withthe aim of complementing sister

Flydubai took anunexpected turn in Junewhen it unveiled a newbusiness class product.Chief executive Ghaith AlGhaith tells Martin Riverswhy the low-cost carrieris going down thepremium path.

Flydubai adds a touch of class

Continuedon Page 42

Ghaith Al Ghaith:Flydubai was

always going to“do things a little

bit different”.

_AA19_oct25_Layout 1 26/10/2013 18:07 Page 41

Page 2: Fly Dubai

LOW-COST CARRIERSAIR TRANSPORT

42

carrier Emirates Airline, which has an all wide-body fleet.

The newcomer’s narrow-bodies are put towork across the Middle East, Asia, Africa andeastern Europe, serving markets that requireneither the capacity nor the premium layout ofEmirates’ larger jets. But its role as a feedercarrier for Dubai is untypical of the low-costmodel, which favours point-to-point flying overhub connectivity. There is also the risk of productinconsistency between Dubai’s short-haul andlong-haul segments.

In many ways, then, incorporating businessclass should not come as a surprise. The strategywould raise eyebrows in the boardrooms of aEuropean or American low-cost carrier, but AlGhaith is convinced of its suitability to the Dubaimarket.

“We’ve been working on this project for the lasttwo years,” he emphasised. “Until now thebusinesspeople that fly with us have travelled ineconomy, so there was real demand that we weremissing out on.”

Flydubai’s latest in-flight surveys, conductedbetween March and August 2013, found that 19%of its customers were travelling on business. Thatcompared with 26%for leisure and 17% forvisiting friends andrelatives (VFR). AlGhaith predicted thatall categories oftravellers wouldappreciate the addedchoice of premiumcabins.

“We also servemany points on thenetwork beyond theMiddle East wherethere is real demandfor tourism; forexample out of Russiaand Ukraine,” henoted. “We know thatbased on the profile ofcustomers who cometo Dubai, there isdemand for businessclass, or first class even. So, again, we weremissing out on that opportunity.”

Al Ghaith accepted that there is a trade-offwhen targeting higher yields. Per-capita costsinevitably rise, coming under pressure fromreduced capacity – 174 seats, down from 189 –as well as ancillary freebies.

But Flydubai is mitigating that risk through astaggered uptake of business class across the fleet.Although all of its near-term aircraft deliveries willhave a two-cabin layout, no final decision hasbeen taken about the tail-end of the 19 unitsarriving by 2015. The schedule for retro-fittingexisting jets is also still under review.

“When you are managing a fleet, you have to bevery careful to put aircraft where you can maximise

returns,” Al Ghaith said, noting yield disparitiesbetween markets. “For phase-one of this project,not all of our aircraft will be retro-fitted; some willremain all-economy. As we experiment and look atour returns, then we will take the decision tointroduce it across more aircraft.”

Pushed to estimate how many aircraft hebelieves will ultimately feature two cabins, AlGhaith added: “It is too early to say, but 20-pluswould be a good target. However, maybe once wehave 10 aircraft with business class we will decideto stop. It’s very fluid.”

On-going experimentationHis caution reflects on-going experimentationwith the low-cost model across the Middle East.Air Arabia sticks fairly rigidly to the no-frillsethos, charging for meals and removing checkedluggage allowances on some routes.

Nas Air opts for a three-tier fare structure withvarying degrees of flexibility and in-flight service.Jazeera has the most generous perks for economypassengers, as well as featuring a European-stylebusiness class with vacant middle seats.

For Al Ghaith, however, any venture intopremium was destined to involve a new cabin.

“The middle-seat option was not something thatappealed to us,” he said. “To be seen as a productof Dubai, we must do things properly.”

Other perks offered in the new business classinclude complementary lounge access, a 12.1inchback-seat HD TV, priority check-in and up to40kg of checked luggage. Economy passengers,meanwhile, must pay for food, checked baggageand access to the in-flight entertainment system.

Asked whether Flydubai still considers itself alow-cost carrier, Al Ghaith gave a characteristicallyenigmatic response. “We are Flydubai,” he saidwith a smile. “What differentiates us is that we areDubai-centric. Dubai is the centre of our gravity.That gives us the ability to serve different markets,and so we try to offer more products.”

While the availability of business class has yetto be fully determined, Al Ghaith is alreadymaking plans for the next wave of potentialaircraft deliveries beyond 2015.

Flydubai’s existing 50-unit 737-800 order willbe fulfilled within the next two years, creating aneed for growth aircraft as well as replacementunits. Al Ghaith had previously told Reuters thatanother 50-unit order could be on the cards.Without repeating that figure, he confirmed thattalks about a new deal have advanced.

“We are looking seriously at making somecommitments in the near future for new aircraft,”he said. “We are looking at both Airbus andBoeing as a solution for our immediate and long-term requirements after 2015.”

Al Ghaith rejected any presumption thatBoeing is the front-runner, insisting that both theA320neo and 737 MAX are contenders. Low-cost carriers typically restrict themselves to asingle fleet type in pursuit of lower maintenancecosts, but synergies with sister carrier Emirates –which operates a mixed fleet – could ease thisconstraint for Flydubai.

“The fact that we initiated discussions with both[manufacturers] shows that we are open minded

about whatever will bebest for the company,”Al Ghaith added. “Wewill evaluate that, andwe will go for the bestoption.”

Whichever aircrafttype Flydubai selects,there is no doubt that itwill continue expandingcapacity. The airlinecarried 5.1 millioncustomers last year –almost half of its footfallto date. Passengernumbers rose by 63% inthe Gulf CooperationCouncil (GCC) alone,compared with averagegrowth of 21% betweenall operators.

Saudi Arabia,Qatar and Kuwait

remain the largest markets in Flydubai’s network,accounting for four out of every 10 seats. Butpassenger numbers for the Commonwealth ofIndependent States (CIS) also rocketed by 72%last year, outpacing the 28% average for allairlines. When measured by available seatkilometres (ASK), Russia and Ukraine now rankamong Flydubai’s top five destinations.

“There are still tremendous opportunities inthe geographical area that we cover,” Al Ghaithconcluded.

“When you consider how fast we have beenable to grow in the short time that we have existed,you know that there is more to come. And themore popular Dubai and the UAE become, themore demand there will be.”

CONTINUED FROM PAGE 41

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