UAE: Airfares have peaked, set to stay at high level till summer

Airfares have reached their peaks and are likely to stay at that level for the next few months, said Ghaith Al Ghaith, CEO, flydubai.

Airfares have increased dramatically in the last year, driven by massive post-pandemic demand and high oil prices in the wake of the Russia-Ukraine crisis.

The UAE airlines have been increasing seating capacity and have announced the addition of a number of new routes.

“Airfares are still very strong as there is a huge increase in fuel prices. They are at their peaks as it is a supply and demand issue. I believe it (airfare) will stay there till summertime,” Ghaith said during an interview on the first day of the four-day Arabian Travel Market 2023, which opened at the Dubai World Trade Centre on Monday.

Flydubai chief said the airline operates Boeing’s 737 MAX aircraft which is 14 per cent more efficient and that helps a lot in terms of offering better pricing to customers.

He added that demand for business class is growing and therefore, it introduced a new business class. Al Ghaith said this will also help make its synergy better with Dubai’s flagship carrier Emirates.

The airline added 12 destinations this year and is likely to add two more and also bring back around nine summer destinations.

“We delayed certain things because the demand on our existing route network is much stronger. So we probably announce one or two more routes in winter.”

50% growth in Q1

Al Ghaith sees demand staying very strong for the rest of the year.

During the interview, he revealed that the Dubai-based carrier recorded 50 per cent more passenger traffic in the first quarter of 2023 compared to the same period last year. “We expect this surge to continue, hence, we will be increasing capacity by around 20 per cent to a record 5 million seats in summer, mainly due to high demand for inbound traffic. I have never seen business as good as last year and this year.”

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He added that the growth of the point-to-point business from Dubai Airport is growing faster than the transit business, reflecting more businesses flocking to the emirate to set up their bases here.

Supply chain

The airline has received delivery of seven aircraft this year and will receive another 17 aircraft.

In terms of supply chain challenges, he said last year was horrible, but this year is manageable and next year is looking better.

US aircraft manufacturer Boeing is facing production quality challenges related to two of several brackets in the fuselage of 737 MAX.

waheedabbas@khaleejtimes.com