Recorded at CAPA Low Cost Long Haul Global Summit, 4-5 Oct 2018

flynas Update – Ready To Adopt Low Cost Long Haul Model In Saudi Arabia

Paul Byrne, senior vice president, flynas, highlights how religious travel habits into Saudi Arabia could help form the backbone of a successful Low Cost Long Haul operation for the carrier based around a fleet of up to 300-seat aircraft serving markets such as Indonesia, Morocco and others.


Paul ByrneFrom our perspective, it's mostly about the product side of things and really just tourism primarily in the Kingdom of Saudi Arabia. So thankfully there's a religious pilgrimage now is Umrah and then there's the Hajj. Umrah used to be a short period during the year. It's now extended up to 10 months and the Hajj takes the other two months more or less.

So now we can see a year round value in long haul. So in the past we would wet lease an aircraft and crew for the Hajj. Typically you're doing that at short notice and at very high rates. So now it makes more sense for us now to look at a 12 month period and say, well for what we paid for the Hajj, we could nearly get nine months of value for our own aircraft.

So this is the way we're looking at it now that we want to do a year round, it's mostly around pilgrimage, but a lot of these destinations would have value for the Saudi flyer as well. So you know, where we ought to be able to combine both where we're taking the Saudis on vacation and pilgrims back in.

Well I suppose we're looking at anything up to 300 seats, but not so dense that it becomes uncomfortable because some of these are going to be eight to 12 hour flying. So we're looking at places like Indonesia and Morocco, where you would probably have a premium content as well. So you might have a cabin that has maybe not the lie flat bed, but at least an area that's more spread out than your normal configuration.

Plus you have to consider again, people are in the air for quite a number of hours. So you can't be sticking them on a 29 inch pitch. So probably have a sweet spot around 270, 250.

Okay, well the Saudi market had Saudi Air for forever. I think they are 70 years in existence. Flynas came along and of course it could never work. Now there's five airlines competing on the domestic market. So we've proved it can work which is great. We've proved that it can be done profitably, which is again, one of the unique parts for us that, you know, we're the only profitable airline in Saudi Arabia.

And it's a very competitive market now. It'll be interesting to see if there's any consolidations or you know, we've already lost an airline previously called SAMA. They just couldn't live with the amount of money that was needed to fund.

Next year, the fare cap has been taken off. So the subsidy's coming off fuel for the state carrier, and with the result that the fares can hopefully rise up.

But it is a very competitive market with five airlines, pretty much fighting on the same routes. It's not easy to make money, but you know we're doing it. Thank God we're, and we're winning awards. We're pushing on and we're, more importantly I suppose than winning the awards, we're retaining awards that we've won, which is really good. So it shows a consistency in our product.

We have a fantastic team that just puts the effort in every single day, delivers the product. The on time performance is wonderful and it's a difficult area with very constrained airports so it's, you know, Saudi Air is doing its best to expand. Obviously for an airline this can never happen quick enough, but you know, we're happy that we're in the right place and we're doing the right thing and we're going to start to see the first Neo coming in next month, which will be a great boost to us, and the more we can get those into our fleet and unify the fleet again as a Neo fleet in the next few years, the better.

Well, the obvious fuel is the fuel saving and now we're up to $85. Like we were in $100, and everyone was there. So that's a huge saving straight away. But the more important thing is it opens up new markets to us. So we can start to do, I don't know, we heard this expression medium haul. We can start looking at medium haul type routes where we could just about stretch it with the same crew, but we're opening up new countries that wouldn't have been accessible with the ceo.

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