ABU DHABI: A third low-cost airline may soon be established in the United Arab Emirates. The airline based in Abu Dhabi will follow in the footsteps of flyDubai based in Dubai and Air Arabia in Sharjah.
“The Middle East is still playing ‘catch up’ with the rest of the world as far as low-cost carriers go,” said David J Bentley, joint managing director of Big Pond Aviation. “The rest of the world is moving on with the continuing evolution of the hybrid model that superficially keeps costs and prices low while catering for the needs of business travelers.”
Along with the Gulf’s premium airlines, the low-cost end of the market has seen substantial growth, with six new carriers established over as many years, including Air Arabia in Sharjah, Kuwait’s Jazeera Airways and Saudi Arabia’s Sama Airlines.
“Abu Dhabi has to compete in the low-cost segment because it is already happening in Dubai and Sharjah,” Bentley said. “There are other smaller airports poised to start competing, such as Al-Ain and Fujairah.”
While major airlines focus on business clientele or tourists flying long-haul routes, the low-cost airlines focus on inter-regional routes.
Many low cost airlines, which started off flying local routes, have grown to establish regional networks such as Air Arabia’s Air Arabia Maroc, set up in Morocco, and Air Arabia Egypt, set to be operational by March 2010.
“For the low costs, the market is the Arab states with connections to India and Pakistan, and maybe North Africa, where all the labor flights go,” said aviation expert Christian Lambertus.
“Low costs have to pay the future oil prices as well,” he warned. “So the question is what will be their margins. The situation that we now have with a lot of low cost airlines will change. Only a few large ones left can apply the economies of scale. There will be cost pressures in the future as the economy starts turning again and oil prices go up.”