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Founded in 2005, Jazeera Airways is a publicly-owned low cost carrier airline based at Kuwait International Airport. The carrier, which has grown to become the second national airline of Kuwait, operates scheduled service to destinations throughout the Middle East.
Location of Jazeera Airways main hub (Kuwait International Airport)
Jazeera Airways share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Jazeera Airways fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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Regional political uncertainty and social turmoil have not been able to stop low-cost carriers in the Middle East from reporting another profitable six months. Two of the region’s key privately owned LCCs, the Sharjah-based Air Arabia and the Kuwait-based Jazeera Airways, have both posted strong profits in 1H2013.
In addition to this, the region’s other two LCCs, the privately owned nasair and the emirate of Dubai-controlled flydubai are anticipating profitable full year results. flydubai reported a maiden profit in 2012 and is looking to continue this momentum into 2013.
nasair has not yet reported a break-even year, despite being launched in 2007, but a restructuring in late 2012 has already seen the carrier reporting profits on a monthly basis.
Jazeera Airway’s regional focus continues to pay dividends for the carrier, with passenger traffic up 7% in May-2013. The airline has seen “significant passenger pick-up” in May on a number of its most important regional routes, even in the face of heavy competition from both LCCs and regional widebody operators. Strong growth was reported on routes to Dubai, Beirut, Amman, Jeddah, Cairo, Sharm El Sheikh, Assiut and Sohag during the month.
Jazeera’s network covers 19 routes in 11 countries, concentrated on the Middle East with most destinations within two hours flight time of its Kuwait hub. Unlike LCC contemporaries in the Gulf region such as flydubai and Air Arabia, the company is concentrating on yield first and growth second. Jazeera aims to maximise profit on its existing sectors on a quarter to quarter basis, rather than trail breaking new markets and expanding its network coverage. This involves increasing frequencies on its highest-demand and most profitable routes, gradually building load factors and raising yield levels.
In the Middle East, it may be impossible to find two carriers sharing a common hub that are more different than Jazeera Airways and Kuwait Airways. One is privately owned, nimble, low cost and highly profitable.
The other is government owned, suffering from decades of losses and burdened with overstaffing and bureaucratic detritus. However the future for both carriers may about to become linked. Jazeera Airways chairman Marwan Boodai has announced that the carrier is definitely interested in purchasing a stake in the national carrier once it launches its long delayed IPO.
In doing so, the small Jazeera may just provide a lifeline to the larger Kuwait Airways.
Jazeera Airways is now six months into STAMP, the business programme designed to take the positive momentum from its financial turn-around programme and return the carrier to a growth trajectory. The programme is based around three key pillars: enhancing yields; improving the carrier’s load factors to a modest 68% by 2014; and leading in market share on the routes it operates in and out of Kuwait.
All of this will be achieved while the carrier maintains the same network of 19 destinations out of Kuwait for the next three years.
Even though Jazeera Airways managed to report a record new profit of KWD3.8 million (USD13.5 million) in 1H2012, the first half of the year has not been an unqualified success for the carrier. While it turned its seventh and eighth consecutive quarterly profits, the carrier’s passenger traffic and load factors have suffered due to the regional unrest in the Levant.
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.
The LCC phenomenon in the Middle East is entering the home stretch of its first decade. The importance of the LCC market in the Middle East has grown steadily since the launch of the region’s first LCC flights by Air Arabia in Oct-2003, but the growth has not been as high as initially anticipated, as carriers can attest to.
Just four airlines make up the regional LCC market – Air Arabia, flydubai, Jazeera Airways and NAS Air. Air Arabia also has two subsidiary carriers – Air Arabia Maroc, launched in 2007, and Air Arabia Egypt, launched in 2010. A third, based in Jordan, has been on hold for several years.
There are also some smaller carriers in the region that are filling the gap between LCCs and full service airlines. Bahrain Air markets itself as a “premium value” carrier, including some LCC elements in its model but also offering two seating classes – including an all-new business class cabin – and a correspondingly greater emphasis on service and product levels. RAK Airways, based in the UAE emirate of Ras Al Khaimah, also has low cost elements, but like Bahrain Air has adopted a hybrid model between full service and low-cost airlines.
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