Flydubai on Course to Expand Routes and Fleet: CEO

MA’IN (Jordan) — Low-cost carrier flydubai, which launched its first flights in June, will more than double the number of cities it serves by the end of this year and triple the size of its fleet by the end of 2010, the company’s Chief Executive Officer said on Tuesday.

By Bruce Stanley

Published: Wed 19 Aug 2009, 11:03 PM

Last updated: Sun 5 Apr 2015, 9:33 PM

Flydubai expects to add Djibouti as its sixth destination on September 1 and to fly to as many as 14 cities by the end of December.

The company is on track with its plans for rapid expansion, in spite of the global downturn in travel demand and flydubai’s failure last month to secure landing rights at three cities in India, Chief Executive Officer Ghaith Al Ghaith said.

Al Ghaith made his comments at a news conference at a resort in Jordan, in his first wide-ranging discussion with reporters since flydubai took to the air on June 1.

With Dh250 million in start-up capital, Dubai’s fledgling budget airline has ordered 50 Boeing 737-800 Next Generation jetliners.

It has already taken delivery of four of the planes, with two more expected this year. An additional six 737s are due in 2010, for an increase in the fleet to a dozen planes.

The airline has rolled out flights in quick succession to Beirut, Amman, Damascus, Alexandria and Aleppo.

“It has been a hectic few months,” Ghaith said.

The US-educated executive declined to give details about flydubai’s financial condition or to say when the company expects to start making a profit. “We are not going to talk about numbers now,” he said, explaining that he believes it would be premature to subject his start-up to a financial analysis. Earlier, on a flydubai flight to Amman from Dubai, Ghaith told Khaleej Times that he expected his company to break even “very soon,” though he refused to discuss its passenger load factors, a standard measure of airline productivity and a clue to profitability. “We are definitely doing better than we expected,” he said on the Monday night flight. “I don’t want to fool myself; summer is the busiest season. But I am pleasantly surprised.” Flydubai competes with its Sharjah-based rival Air Arabia on all five of its current routes. Djibouti, in eastern Africa, will be its first destination that Air Arabia does not also serve, and flydubai wants to fly to more such “under-served” cities in the future, Ghaith said in the interview. “Djibouti is a good opportunity for us. We could have gone to another place. It’s a test.” Flydubai had expected to be flying by now also to three cities in India, but it was forced to postpone those plans for “an operational reason” that Ghaith refused to explain. It hopes to begin flights to India eventually and has redeployed to other routes the aircraft it had planned to fly there.

Flydubai’s strategy is to serve cities that are within a flying time of four and a half hours from Dubai. It has no interest in flying longer distances, which would require a different type of aircraft and a different business model, Ghaith told reporters.

His comments came just one day before Malaysia-based airline AirAsia X plans to begin selling tickets for long-haul, low-cost flights between Kuala Lumpur and Abu Dhabi. AirAsia X executives say they hope eventually to make Abu Dhabi a hub for shorter low-cost flights within the Middle East, eastern Africa and Central Asia — more or less flydubai’s own sphere of operations.

Ghaith played down any competitive threat from Air Arabia, AirAsia X and other budget carriers in the region. “Low-cost in this part of the world represents at best 5 per cent of the traffic. Low-cost in America represents 20 per cent of the traffic…. Looking at that statistic suggests there’s room for more airlines,” he said.

To help tamp down its costs and air fares, flydubai did away with seat-back magazine pockets and “carved out” two inches from the back of every passenger seat in its aircraft, said Daniel Kerrison, the company’s manager of in-flight product development. As a result of this saved space, flydubai was able to squeeze nine additional seats into each of its planes. Its 737s carry up to 189 passengers.

The company’s cabin designers even argued about whether to make each seat rigid, with no means of making it recline, in the interest of saving still more space. In the end, they settled on letting each seat recline a modest two inches, Kerrison said.

Ghaith pays close attention to such details, company staffers say. For example, flydubai doesn’t charge passengers for in-flight meals they might not want, but customers can pay extra for a range of snacks and sandwiches. Ghaith himself selected the bread that flydubai’s caterers use to make its lamb, chicken and aloo bhaji sandwich wraps. “This is my biggest contribution to the airline,” he said during Monday’s flight, laughing between bites of a chicken tikka and mint chutney wrap. Ghaith acknowledged that flydubai could do more to trim its costs, declining to give specifics. The company doesn’t currently hedge its fuel purchases — its “single most uncontrolled expense” — though it might do so after it grows bigger, he said. But low-cost, for flydubai, doesn’t necessarily mean no-frills.

Unlike with some budget airlines, each flydubai passenger gets an assigned seat. And while Irish low-cost carrier Ryanair is considering flying passengers standing up and charging them to use the toilet, flydubai has no such plans.

“We’re never going to be a Ryanair because service is important to us,” said flydubai spokeswoman Heather Redpath. Added Ghaith:

“I’m not sure you’ll see our captains washing planes.”

· bruce@khaleejtimes.com