"So far cost pressures are a bearable issue for us"
Published: 18 Jun 2008
EFT Travel Distribution Middle East 2008
Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa, is thriving on the strong economic growth of the region.
Last month, the LCC shared its financial results for the first quarter of the year ending March 31, 2008. The airline's net profit was AED 78 million, an increase of 81% compared to AED 43 million for the first quarter of 2007. The airline served 757,000 passengers during the quarter, an increase of 31% over the same period in 2007.
"We are the first low-cost carrier in the Middle East and North Africa, but our success since our launch has resulted in many other companies to start LCCs of their own. However, we are still the largest and most profitable LCC in the region, and have the largest fleet as well as the largest destination network. In terms of recent achievements we have expanded tremendously in all areas, and our financial results show strong profits and considerable revenues," A. K. Nizar, Head of Sales, Air Arabia told EyeforTravel.com's Ritesh Gupta.
The airline intends to continue to expand its destination network which currently covers the Middle East, North Africa, South Asia and Central Asia.
"We have set up two additional hubs in Morocco and Nepal, as well as joint ventures with airlines based in those two countries that will allow us to expand throughout Southeast Asia, West Africa and Western Europe. This will enable us to bring our unique and innovative brand of low-cost flights to more people than ever before," said Nizar.
As LCCs across Europe and even in Asia are tying up with GDS to increase their share of corporate travellers, Air Arabia isn't averse to joining the GDS platform.
"Air Arabia has worked hard to remain at the forefront of technological innovations in aviation, and GDS have certainly kept pace with the industry by giving major carriers from all over the world a network that ties them in closely with hotels, travel agencies and car rental agencies," said Nizar, adding that Air Arabia is the first airline to adapt e-ticketing in the region.
"The carriers that make use of GDS tend to be long-haul conventional carriers and not LCCs. As we expand, the need may rise and we are open to any partnership that will add value to the services we offer and acts in the benefit of our business," he said.
"As a carrier that makes immense effort to be ground-breaking and innovative, we are at the forefront of new technology in the LCC sector. Our continued profits and growth in the face of increased competition and rising fuel prices demonstrate our success in distribution and many other areas," he said.
Nizar said the airline is witnessing 30% of its passengers making use of the Internet to book tickets. The airline intends to grow this to 50% in the next couple of years. "With new hubs coming, online will emerge as a strong marketing tool for us," he said.
"We have made every effort to create a website that is easily accessible, and works well. The website, www.airarabia.com, is a portal that gives passengers hassle free access to our low-cost fares and comprehensive destination network, and has been very popular," said Nizar. "As a low-cost airline, we have a very streamlined operation that reduces in costs in all areas. This makes us far less vulnerable. So far cost pressures are a bearable issue for us. Passengers want more than ever the best fare possible, and we are very often responsible for that fare."
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