JEDDAH, 26 April 2006 - The monopoly on the lucrative Jeddah-London route is soon to go. British Midland International (bmi), which inaugurates its new route on May 19, has set its standard economy class fares at around SR1,900 and pose serious competition to Saudi Arabian Airlines, currently the monopoly holder on the route.
“Not only is that on,” said Nigel Turner, CEO of bmi, “but we’re going to beat it. We are opening with a SR1,600 promotional price.”
After British Airways withdrew from the route last year, bmi took over.
“British Airways had a limited number of slots at Heathrow and chose to use them in a different way. “They wanted to develop services to other parts of the world and they prioritized that over the Kingdom.”
Turner described Saudi Arabia as the economic powerhouse of the region; for it not to have a flight into London Heathrow - one of the world’s busiest international airport - was “completely ridiculous. “When BA pulled out, we saw an opportunity to serve the Kingdom profitably and to serve it safely.”
Addressing the implication of security issues in BA’s withdrawal, he said that as the CEO of the airline and effectively the person responsible for the safety of all of the airline’s passengers 4,500 employees and 10 million customers he said that, “We would not be flying here unless we believed it was as safe as flying to everywhere else.”
The new route into Jeddah is part of bmi’s expansion into the long-haul business.
“We have a very strong knowledge of this region from the 60’s and 70’s,” said Turner, “but then we retrenched to short haul.”
In 200 bmi restarted their long-haul program to the US and 2005 set up the London-Riyadh route, which marked their return to the region.
The decision to fly to Jeddah was always dependent on the success of the Riyadh route.
“Not to my surprise and much to my delight,” said Turner, “the majority of our revenues on the London-Riyadh route are generated from the Kingdom, rather than the UK. It’s a great vote of confidence.”
Turner felt that the different character of bmi had a lot to do with the response. Special attention to quality of food, staff and cabin service coupled with long experience with the customs of the area had, Turner thought, been important factors in generating the positive response to the airline. The major market focus is on the western expatriate, bmi’s home ground. The UK and US expatriates both travel through Heathrow and bmi has links with ongoing flights with members of the Star Alliance and BA. The Star Alliance includes Lufthansa, United Airlines, US Airlines, Singapore, SAS, Air Canada - the alliance covers about 25 percent of all commercial flying.
However, applications for visas to the UK by Saudis is up on last year’s figures, so the market for Saudi-UK journeys looks set to increase, despite the increasing leisure traffic to the Far East
Ravi Pikle, the commercial development manager for India and the Middle East confirmed the price and added that only SR500 separated the various classes available on the flights. “After the promotional period, the standard price will be about SR1,900 to SR2,000,” he said.
Pikle advised that it would be advisable to book peak season travel well in advance “to attract the price, like any other airline.”
The airline, had achieved the low prices because their cost base is significantly lower than others. “We are nearly 70 years old and because we have never had any state subsidy. We have had to become very efficient. There’s no smoke and mirrors; people will get a good level of service for the price.”
With oil prices over $75 per barrel, fuel surcharges affect the entire airline industry. “We are all going to have to live with that,” he said, “but our aircraft are fuel efficient and clean.”
Bilateral agreements between bmi and Saudi Arabian Airlines have resulted in landing slots being made available at Heathrow and the two main airports in the Kingdom — Jeddah and Riyadh. Slots are available at Heathrow but very difficult to obtain.