flydubai Turns Up The Heat In The Middle East

While Kuwait Airways continues to embroil itself with political upheaval and a costly lawsuit against Iraqi Airways, it has fallen behind low-cost carrier Jazeera Airways and will be pushed even harder with flydubai’s presence.

While Oman Air has started international operations strongly since Gulf Air wound up its hub at Muscat in favour of Bahrain, the airline has not capitalised on the growth in the GCC with the capacity that the airport has on offer. Both Muscat and Salalah Airports are relatively under-utilised in contrast to other Middle East airports and flydubai is making a splash with double-daily flights to both Muscat and Kuwait.

As flydubai takes on more 737-800s, expect the number of frequencies to increase to daily services, especially in Kuwait.

Where some price differential exists between Jazeera Airways and Kuwait Airways, flydubai can step in with its lower fares and undercut both. Not only that, it has the material support of the Dubai Government: the airline is shielded particularly well from excessive airport fees at Dubai International Airport as well as fuel, labour and supporting infrastructure costs – all helping to keep ticket prices down.

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This competitive advantage is being leveraged to expand penetrative growth within the GCC region and the next phase of expansion will ultimately focus on Saudi Arabia in the near term, as well as Iraq and Iran.

While Emirates is shying away from an IPO amidst a financial climate that would not be conducive to its true value, there is every possibility that flydubai could be partly or fully spun off first in the future.

For now, flydubai’s impressive growth continues unabated – the opening of the new Dubai World Central Al Maktoum International Airport will further support and cement this stunning airline’s ambitions less than two years since it was launched.

This column was written by FBE Aerospace analyst Saj Ahmad.