Air Arabia

flydubai has bright outlook after recording first profit and emerging as close partner to Emirates

flydubai has recorded its first annual profit and is preparing more rapid expansion for 2013 and beyond. flydubai, which has already surpassed Sharjah-based Air Arabia as the largest low-cost carrier in the Middle East based on seat capacity, is now looking at placing a new order for 50 narrowbody aircraft. It is already committed to growing its fleet from a current 28 737-800s to at least 50 aircraft by the end of 2015.

flydubai has grown rapidly since being launched in 2009 by the Dubai government, which also owns Emirates. Over the years it has adopted a hybrid model which allows it to fill, in some respects, a role as a regional carrier for its bigger full-service sister carrier. The hybrid approach has resulted in rapid and profitable expansion as flydubai has entered short and medium-haul markets that are too small for Emirates’ all-widebody fleet but in many cases have sufficient yields to support a full-service carrier. At the same time flydubai has been able to stimulate demand by offering low fares and is able to successfully operate alongside Emirates on some of the biggest routes within the Middle East.

Ryanair opens two new bases in Morocco, 6 months after charges dispute; and RAM looks for a partner

Europe’s largest low-cost carrier Ryanair will establish two bases in North African tourism hotspot Morocco in Apr-2013, just six months after the Irish-based carrier’s decision to cut 34 frequencies, including several routes entirely, in protest at rising costs at the country’s airports.

But in a major turnaround Ryanair will base two aircraft at Marrakech and another at Fes while also adding two new Moroccan airports at Essaouira and Rabat as it looks to grows its Morocco operations to 60 routes and eight airports, delivering up to 2.5 million passengers a year to the country.

The decision is in stark contrast to situation in Jun-2012 when Ryanair announced it would cancel 34 weekly flights, about 14% of its capacity, to and from Morocco, claiming ONDA, the state owned airports authority had “reneged  on its agreement with the airline by imposing a new monopoly handling company on Ryanair which would have resulted in a massive increase in charges for the airline”.

The decision by Ryanair first to reduce capacity and now reinstate it offers a significant boost for Morocco’s struggling economy, heavily reliant on European tourism. But it will also put further pressure on state-owned Royal Air Maroc (RAM).

UAE airports booming, may reach 80 million pax throughput in 2012; Dubai to become world's biggest

The UAE has experienced a decade of relentless aviation growth. Separated by less than 120km, the three largest airports in the country at Dubai, Abu Dhabi and Sharjah have seen their traffic driven by their home carriers, Emirates, flydubai, Etihad and Air Arabia, each of which handles the majority of passengers passing through the airports.

This year could see the three airports reach a combined 80 million passenger throughput. With each achieving double digit growth, a combination of large order books for the local airlines and an increasing fleet of foreign carriers attracted to the market, the UAE airports are fast approaching the total airport traffic of New York City's system, stagnating at a little above 100 million passengers annually.

Despite a massive airport construction programme, capacity is being challenged and the restrictions on air traffic movements among the UAE and its neighbours are increasingly a constraint on efficient operation.

Russian LCC market expanding with increased international attention as easyJet and Ryanair circle

Russia is seeing increasing low-cost airline activity with a number of recent developments pointing to the opening of the eastern nation’s LCC market. Since the collapse of the country’s only LCCs Avianova and Sky Express in Oct-2011, there has been no domestic low-cost traffic but there has been growth in international low-cost traffic from foreign carriers.

The domestic market would also receive a boost if Russia authorises foreign LCCs to compete domestically, which is currently being considered. Such a change in policy could lead to domestic services being introduced by leading European LCC groups such as easyJet and Ryanair as well as lead to the launch of new LCC subsidiaries from Russian full service airline groups such as Aeroflot and Transaero.

easyJet has unveiled plans to enter the Russian market in early 2013, initially with flights from London Gatwick to Moscow but the carrier is also interested in several other international routes from the UK and Switzerland to Russsia. Ryanair is also interested in entering the Russian market and has applied for traffic rights in the UK-Russia market.

Air Arabia reports another six months of profit and consistent growth

Air Arabia continues to prove it is one of the Middle East’s most consistently profitable airlines. While other carriers in the region have suffered through the vagaries of the regional economic climate and the various social and political disruptions, the carrier has continued to report solid results, despite the external shocks buffeting it and mounting competition in the market space it pioneered in the Middle East.

With its low-cost operation, solidly installed passenger base and nimbleness in exploring new routes and reallocating capacity, the carrier soldiered through the high oil prices and Arab Spring period with comparative impunity. Although the regional political climate is far from settled, economic conditions are improving and the carrier is now looking to capitalise on renewed traffic in the Middle East.

Jazeera Airways and Air Arabia stick to their models and report double-digit increases in profits

Business is booming for LCCs in the Middle East. The two oldest low-cost airlines in the region – Air Arabia and Jazeera Airways – have both reported profitable first quarters, as the regional political environment cools and oil prices begin to trend back from their highs earlier in the year.

Both airlines have positive outlooks for this year. Jazeera Airways just reported its seventh consecutive quarterly profit – a record run of profitability for the airline – and aims to continue the success with its new strategic management plan (STAMP). Air Arabia achieved a double-digit increase in profit during the first quarter and the carrier plans to continue to enter new markets and launch new business ventures this year.