Dammam King Fahad International Airport

Gulf Air and Bahrain Air to battle in Saudi Arabia’s Dammam

Saudi Arabia’s Dammam King Fahad International Airport (KFIA), on the other side of the King Fahd Causeway connecting Saudi Arabia to Bahrain, is set to become a home away from home for Gulf Air and Bahrain Air. By the middle of Jun-2012, the two competing Bahraini carriers will be operating 37 weekly flights to/from the airport, located less than 100km from Bahrain International Airport, the home for both carriers and the sole commercial airport in Bahrain.

Dammam is Saudi Arabia’s third largest airport by passenger traffic, after Riyadh and Jeddah. It is also one of just four designated international airports in the country.

New Cebu Pacific long-haul operation could push out Philippine Airlines but may require hybrid model

The new plan from leading low-cost Filipino carrier Cebu Pacific to offer long-haul services from 3Q2013 represents not just the fourth low-cost long-haul operation in Asia, but the first time such a carrier has potential to force a full-service rival – Philippine Airlines (PAL) – out of business.

Cebu Pacific will benefit from the Philippines’ extremely price sensitive market that has seen LCCs achieve a staggering 80% share of the domestic market and a fast-growing share of the regional international market. Demand for low-cost long-haul services will come primarily from the large visiting friends and relative (VFR) and migrant worker market. But Cebu’s new low-cost long-haul operation will also benefit from growing tourism and potentially the ability to transfer passengers over a geographically convenient hub if Cebu decides to stray from its original point-to-point model.

While PAL is the nation’s sole long-haul carrier, its lack of global alliance membership, relatively small domestic operation and higher cost base create low barriers for entry. National sentiment for Asia’s oldest airline may run high, but as seen in the Philippines’ domestic market, passengers vote with wallets.

MAS will achieve its targeted 12% capacity reduction by February, to the delight of Gulf carriers

Gulf carriers and AirAsia will likely emerge as the main beneficiaries of the network restructuring at Malaysia Airlines (MAS). The Malaysian flag carrier has selected several routes to discontinue by early next month, resulting in a 12% reduction in system-wide capacity as it begins implementing its new business plan.