Long haul LCC narrowbody: Air Arabia, Jazeera Airways join the party
Long haul low cost narrowbody operations are spreading to the Middle East with the upcoming launch of services from Sharjah to Kuala Lumpur by Air Arabia and from Kuwait to London Gatwick by Jazeera Airways.
Kuala Lumpur will become Air Arabia's first long haul destination on 1-Jul-2019 and London will become Jazeera's first long haul destination at a date later in 2H2019 that has not yet been determined.
Air Arabia and Jazeera are the Middle East's two oldest LCCs, having launched in 2003 and 2005. Flydubai launched in 2009 and by some measures is the only Middle East LCC with long haul routes, but is generally no longer considered an LCC.
Air Arabia is able to add Kuala Lumpur and other long haul routes not yet announced using its new fleet of A321neoLRs. Air Arabia has only committed to six A321neoLRs but is considering the acquisition of more long range narrowbody aircraft as part of an order for more than 100 new aircraft that the group expects to place in 2H2019.
Jazeera is also considering acquiring A321neoLRs but is using A320neos to launch London and - at least for the time being - is focusing on expanding its A320neo fleet.
Summary:
- Air Arabia is launching service between Sharjah and Kuala Lumpur on 1-Jul-2019, which will become the longest LCC narrowbody route from the Middle East as well as the longest LCC narrowbody route from Asia Pacific.
- Air Arabia plans to launch a few more long haul routes as it takes delivery of five more A321neoLRs and could accelerate long haul expansion by including long haul variants as part of a new order for over 100 aircraft.
- In 2H2019 Jazeera plans to launch services between Kuwait City and London Gatwick, which will become the longest A320neo route in the world.
- Jazeera is considering the launch of other long haul routes as it expands its A320neo fleet, and could later also acquire A321neoLRs.
- Flydubai currently operates the only LCC routes from the Middle East that are more than 6 hours, although it is debatable whether the airline should still be considered an LCC.
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The Middle East LCC sector is small and has focused on short haul
As CAPA highlighted in a recent analysis report, the Middle East has only five LCCs operating a combined fleet of 132 aircraft. LCCs account for 9% of the commercial aircraft fleet based in the Middle East and only 17% of seat capacity within the region.
See related report: Middle East and Africa LCCs: huge growth opportunities, but challenges
The five Middle East based airlines on CAPA's LCC list are: Air Arabia, flyadeal, flynas, flydubai and SalamAir.
Flydubai is the only long haul operator (based on most definitions). Flyadeal only operates domestic services at the moment, although it is planning to begin short haul international services within the next year and is considering possible long haul routes as part of a future phase in its development.
Air Arabia, flynas and SalamAir operate international services but do not have any flights of more than 5hr 30min.
Middle East LCC fleet ranked by number of in service aircraft: as of 6-May-2019
| Rank | Airline | IATA | Country | Year launched |
Aircraft in service |
Longest route |
|---|---|---|---|---|---|---|
| 1 | flydubai | FZ | UAE | 2007 | 46 | 6hr 40min |
| 2 | Air Arabia | G9 | UAE | 2003 | 40 | 5hr 25min |
| 3 | flynas | XY | Saudi Arabia | 2009 | 30 | 5hr 0min |
| 4 | flyadeal | F3 | Saudi Arabia | 2017 | 11 | 2hr 25min |
| 5 | SalamAir | OV | Oman | 2017 | 4 | 5hr 0min |
Air Arabia's longest route (Sharjah-Kyiv) has a scheduled block time of 5hr 25min. It has two other routes that are slightly more than 5hr (Sharjah-Moscow and Sharjah-Nairobi) and 10 routes of 4hr to 5hr (Sharjah to Almaty, Beirut, Chennai, Chittagong, Colombo, Dhaka, Istanbul, Kathmandu, Kochi and Trivandrum).
Flynas' longest route has a scheduled block time of 5hr 0min (Hyderabad-Riyadh). It has three other routes of at least four hours (Islamabad-Riyadh, Lahore-Dammam and Lahore- Riyadh).
SalamAir's longest route also has a block time of 5hr 0min (Dhaka-Muscat). It has two other routes of more than four hours (Muscat-Alexandria and Muscat-Khartoum).
Flydubai has six routes of more than six hours
Flydubai's longest route currently has a block time of 6hr 40min (Dubai-Helsinki). It has five other routes of at least six hours (Dubai to Bratislava, Catania, Krakow, Prague and Sarajevo). Flydubai has more than 20 routes of four to six hours; approximately half of these are at least five hours.
More than 5% of flydubai's departures are more than six hours, and another 29% are more than four hours.
Flydubai length of flight by % of departing frequencies: week commencing 6-May-2019
Source: CAPA - Centre for Aviation & OAG.
Flydubai is counted in CAPA's airline rankings to be the largest LCC in the Middle East based on seat capacity and fleet size. However, it has evolved since its 2009 launch from a pure point-to-point LCC to a hybrid airline following a network model.
Flydubai has business cabin on a large proportion of its 737-800 fleet and offers seatback IFE in economy. Meals are also served to all business passengers and economy passengers travelling on Value or Flex fares (passengers flying on Economy Lite fares have to pay for meals).
See related report: flydubai's model is network; Gulf Air's is boutique
737 MAX 8 opens up long haul opportunities for flydubai
Flydubai's 737 MAX 8 fleet even features lie-flat business class seats. The airline took delivery of its first 737 MAX 8 in 2H2017 and has used the new type to launch new long haul routes.
However, flydubai was already using the 737-800 on routes of more than six hours: for example, Bratislava and Sarajevo were launched back in Dec-2014. Prague was added in Jul-2016.
The other three of flydubai's six current routes of more than six hours were launched with the 737 MAX 8: Krakow in Apr-2018, Catania in Jun-2018 and Helsinki in Oct-2018. Flydubai is launching Naples, another route of more than six hours and its second in Italy after Catania, on 4-Jun-2019.
Flydubai CEO Ghaith al Ghaith told the CAPA Middle East and Africa Aviation Summit in Dubai on 30-Apr-2019 that new long haul routes such as Naples would not be possible without cooperation from Emirates. "There are many places like that", he said.
(Later this month CAPA will publish a CAPA TV interview with Ghaith al Ghaith on the airline's network expansion plans and opportunities for further growth in the long haul segment.)
Flydubai remains confident in the 737 MAX
Flydubai currently has 11 737 MAX 8s and three 737 MAX 9s that have been grounded due to the global grounding of the MAX fleet, according to the CAPA Fleet Database. It has backfilled its MAX routes, including Catania, Helsinki and Krakow, with 737-800s.
Some of its flights to Catania and Helsinki have flight times of more than six hours. This is still within the range of the 737-800, particularly as flydubai uses two class 737-800s with 174 seats on its long haul routes, rather than the 189 all-economy configuration it uses on regional routes.
Flydubai is considering launching more long haul routes, including some deeper into Africa and Europe, as it expands its 737 MAX fleet. The airline has 237 MAX family aircraft on order.
Flydubai fleet summary: as of 6-May-2019
| Aircraft | In service | In storage | On order |
|---|---|---|---|
| Boeing 737 MAX | 0 | 0 | 121 |
| Boeing 737-10 | 0 | 0 | 50 |
| Boeing 737-8 | 0 | 11 | 66 |
| Boeing 737-800 | 46 | 0 | 0 |
| Boeing 737-9 | 0 | 3 | 0 |
| Total: | 46 | 14 | 237 |
Mr Ghaith told last week's CAPA Middle East and Africa Aviation Summit that the 737 MAX "is going through a process of revalidation" and he is confident that the authorities will ensure that the aircraft is safe when the grounding order is lifted.
"We continue to monitor the situation and will always take measures to make sure we have highest level of safety and highest level of satisfaction for our customer."
Mr Ghaith pointed out that flydubai's MAX order takes the airline until 2030 and includes replacing the existing 737-800 fleet as well as growth. He said the airline intends to remove 737-800s as they turn eight years old. Flydubai is turning 10 years old on 1-Jun-2019 and its fleet of 46 737-800s has an average age of 5.2 years, according to the CAPA Fleet Database.
Jazeera Airways remains committed to LCC model
Jazeera has also evolved since its 2005 launch, drifting away from a pure LCC model and becoming a hybrid.
Jazeera does not have a separate business class seat like flydubai. However, it offers an attractive business class product that includes a blocked middle seat, a separate cabin (a movable curtain separates business and economy) and lounge access in Kuwait.
Jazeera's A320s have 165 seats rather than the standard 180, providing more legroom than a typical LCC. Up to six seats are blocked depending on business class demand, reducing the capacity to 159.
Jazeera offers complimentary checked bags for both classes of travel (flydubai does not offer this for economy passengers). However, it does not offer any hot meals and charges economy passengers for snacks, salads and wraps (complimentary in business). IFE is available using streaming and an app, rather than via seatback monitors.
CAPA has not counted Jazeera as an LCC in recent years - due to its hybrid product - but the airline still considers itself an LCC. Jazeera CEO Rohit Ramachandran told the CAPA Middle East and Africa Aviation Summit on 29-Apr-2019 that the airline still follows "the basic tenets of the low cost bible" but customizes the model for its region.
He pointed out that Jazeera's average aircraft utilisation rate is high, at 15 hours, and ancillaries are a large contributor to revenues. Its ratio of online sales is also high, and although it does use GDSs, these are not too expensive and are considered cost neutral.
The Jazeera model is to keep costs as low as possible and pass on the benefits to customers. The idea is to offer a good price, good schedule and a comfortable inflight experience, and to be on time. Champagne and caviar are not priorities, Mr Ramachandran stressed.
Kuwait-London to become Jazeera's first long haul route
Jazeera is not planning to upgrade its product even as it launches long haul routes.
Jazeera will continue to offer its current business class product with blocked middle seats. In fact, Jazeera is hoping it will be able to sell more blocked seats on the Kuwait-London route in order to avoid payload restrictions - based on the 165 seats it has on the A320neo, Jazeera expects some payload restrictions.
Mr Ramachandran expects Kuwait-London will be the longest A320neo route in the world when it launches in 2H2019. Jazeera has not yet set a launch date for the route or begun ticket sales, but has selected Gatwick over other London area airports.
Kuwait to London has a scheduled flight time of 6hr 55min on British Airways and a scheduled flight time of 6hr 40min on Kuwait Airways. The flight is slightly shorter from London to Kuwait. Both of the existing competitors use 777s and fly from Heathrow.
Jazeera's longest routes are Kuwait to Mumbai and Kochi, both of which have a scheduled block time of approximately five hours. Kuwait-Hyderabad is its only other route above four hours.
London will be Jazeera's second destination in Europe after Istanbul, which is a flight of slightly less than four hours from Kuwait.
Jazeera Airways length of flight by % of departing frequencies: week commencing 6-May-2019
Source: CAPA - Centre for Aviation & OAG.
Jazeera expands A320neo fleet
Jazeera has evaluated A321neoLRs, which would give it the range to serve London and all of Europe without any payload restrictions. It could also use A321neoLRs to serve East Asia and deeper into Africa, whereas it only now serves Egypt.
However, the focus at the moment is on expanding the A320neo fleet, and longer range narrowbody types will only be assessed after determining how the A320neo performs on Kuwait-London.
Jazeera currently operates eight A320ceos and one A320neo. The airline resumed fleet expansion in 2018, when it took an eighth A320ceo and its first A320neo, following a hiatus of several years. Mr Ramachandran told CAPA the resumption of expansion is part of a plan to double its fleet (to 14 aircraft) within two years and triple its fleet (to 21 aircraft) within four years.
Despite having recently shelved plans to order new aircraft, Jazeera now intends to lease additional A320neos, taking advantage of attractive lease rates for the type. It had been evaluating the A220, 737 MAX and Embraer E2, along with a potential order for A320neo family aircraft.
Leasing additional A320neos is sensible as it enables Jazeera to stick with a single aircraft type and gives the airline the range to operate most of the long haul routes it has been evaluating. Jazeera will inevitably add more routes of more than five hours as it takes delivery of more A320neos. Leasing a small number of A321neoLRs is also an option without having to place an order.
(Later this month CAPA will publish a CAPA TV interview with Rohit Ramachandran on the airline's network and fleet expansion plans, including expectations for the London route.)
Air Arabia takes first A321neoLR and prepares to begin long haul operations
Air Arabia has committed to leasing six A321neoLR as a tool for experimenting with new long haul routes. The airline agreed to lease the six aircraft from Air Lease Corporation (ALC) in late 2017 and took delivery of the first of the new type in Apr-2019.
Air Arabia put its first A321neoLR into service on 28-Apr-2019 and the aircraft is currently being operated on short haul flights from Sharjah to Cairo, Riyadh and Jeddah. Air Arabia's A321neoLR will begin long haul operations on 1-Jul-2019, when the airline launches four weekly flights from its Sharjah base to Kuala Lumpur.
There are currently no services from Sharjah to Kuala Lumpur, but Emirates operates two daily flights from nearby Dubai to Kuala Lumpur and Etihad has one daily flight from Abu Dhabi to Kuala Lumpur. Malaysia Airlines dropped Dubai-Kuala Lumpur in early 2016 and AirAsia X dropped Abu Dhabi-Kuala Lumpur in early 2010.
Sharjah-Kuala Lumpur has a scheduled block time of 7hr 25min eastbound and 7hr 15min on the return sector. Sharjah-Kuala Lumpur is 2hr longer than Air Arabia's longest current route (Sharjah-Kyiv as discussed earlier in this report) and will become the longest LCC narrowbody route from the Middle East and from Asia Pacific.
As it takes additional A321neoLRs, Air Arabia is considering other long haul routes, including China and Thailand in Asia. Air Arabia CEO Adel Ali told the Arabian Travel Market in Dubai on 30-Apr-2019 that Bangkok is particularly a priority, saying "we will be there once we have enough airplanes".
Air Arabia plans to place major new aircraft order in 2H2019
Air Arabia is also considering acquiring more long haul narrowbody aircraft as part of a massive new order. Air Arabia currently does not have any commitments beyond the five additional leased A321neoLRs. Mr Ali said that a new order was "overdue" and the airline group was expecting to place an order in three to four months for "100 plus" new aircraft.
Air Arabia is considering the A320neo family as well as the 737 MAX family. Mr Ali said Air Arabia is large enough to potentially operate both Airbus and Boeing aircraft. He said the last round of meetings with Airbus and Boeing took place in the week commencing 29-Apr-2019, although Boeing's priority is understandably currently focused on regaining certification for the 737 MAX.
The Air Arabia Group currently has a fleet of 53 A320ceos along with the one A321neoLR, according to the CAPA Fleet Database. Most of the fleet is based in Sharjah but Air Arabia also has a small second UAE base at Ras Al Khaimah, as well as overseas affiliates in North Africa: three A320ceos are currently operated by Air Arabia Egypt and 10 A320ceos by Air Arabia Maroc.
The new order will be used to expand all four bases and replace existing aircraft. While Air Arabia is mainly considering A320s and 737s, Mr Ali said smaller aircraft (such as the A220 and E2) are a possibility for Air Arabia Egypt and Air Arabia Maroc, given their domestic market requirements.
Mr Ali said Air Arabia had been very happy with the A320ceo over the past 16 years and its success is because of this aircraft. However, "we always wanted to do a little bit more" in terms of capacity and range.
Air Arabia could become a pioneer in long haul LCC operations from Middle East
In addition to expanding into East Asia, Air Arabia is keen to operate deeper into Europe and Africa using new generation long range narrowbody aircraft, such as the A321neoLR, the soon to be launched A321neoXR, the 737 MAX 8 and 737 MAX 9.
Air Arabia's longest Sharjah-Europe route is currently Prague and its longest Sharjah-Africa route is Nairobi. Air Arabia Maroc has several destinations in Western Europe but none of these are long haul routes, given Morocco's proximity to Europe.
Air Arabia was the Middle East's first LCC and has been highly successful in its first 16 years. It is now well positioned to use new narrowbody technology to embark on a new growth phase.
Air Arabia has configured its A321neoLRs with 215 all-economy seats compared to 174 seats on its A320ceos. The airline has one less row than most LCCs, enabling it to offer a 32in pitch. It otherwise has a typical LCC product, selling meals, drinks, checked bags and IFE streaming.
Mr Ali said Air Arabia does not intend to change its product or start offering a business class service as it expands into the long haul segment. "I think we have the best economy class product at the best price in the industry. I'm not interested in business class. Don't fix something that's working", he told the Arabian Travel Market exhibition.
Long haul low cost narrowbody segment is trending up globally
Long haul low cost narrowbody is an emerging segment of the market with huge growth opportunities in virtually every region. Although most long haul low cost narrowbody operations have so far focused on the trans Atlantic market, there is now some movement in Asia Pacific and the Middle East.
Air Arabia is the first LCC from the Middle East to operate the A321neoLR. The first three operators in Asia Pacific - Australia-based Jetstar Airways, Jetstar Japan and Japan's Peach - all plan to start taking A321neoLRs in 2020. Several more Asian LCCs, including AirAsia X and VietJet, are considering acquiring the new type.
See related report: Low cost long haul narrowbody aircraft: Asian gamechanger?
Air Arabia will inevitably be followed by other Middle Eastern LCCs in operating the A321neoLR or A321neoXR. There are also opportunities for Middle Eastern LCCs to follow flydubai in using the 737 MAX 8 - once the aircraft is recertified and back in service - in launching new long haul routes.
The Middle East is ideally positioned for long haul low cost narrowbody operations as new narrowbody technology opens up virtually all of Europe, Africa and Southeast Asia. There are no widebodies operated by LCCs in the Middle East and widebody fleets seem unlikely, given the network opportunities provided by new generation long haul narrowbody aircraft.