No plans for KSA domestic market - flydubai CEO

Low cost airline flydubai has no plans to bid for a slice of Saudi Arabia’s domestic aviation market, amid news that the oil-rich Gulf kingdom will allow foreign carriers to operate locally from September.

In an interview with Arabian Business, CEO of the company Ghaith al-Ghaith said the state-owned carrier was focusing on its network in and out of Dubai, with no plans to go tap new markets for the time being.

“We have not bid for a license in Saudi Arabia,” he said.

“I believe as an aviation person this is a fantastic move by Saudi Arabia - it is fantastic for our industry. But as far as we are concerned at flydubai we are not even three years old, we are in the first stages of establishing ourselves, and we are focusing on our growth in Dubai. We have no plans to go anywhere else.”

Asked about a possible move to Dubai’s Al Maktoum Airport, Al Ghaith said this was also a good opportunity but the company had no confirmed plans.

“We are definitely interested, but our focus right now is on our Dubai International Airport expansion, especially the expansion of Terminal 2.

“We are interested in the future, but when [that will be], we are not in a position to comment on.”

The airline was set up in 2009 to provide a no-frills option to business travellers and tourists flying in and out of the UAE’s busiest emirate.

The carrier’s first aircraft order was for 50 Boeing models to be delivered in full by 2016.

It has so far received 23 of the planes, and is expecting another four by year-end.

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The airline will also add up to five new routes, Al-Ghaith said, as part of its ongoing regional expansion programme.

“We should have four to five new points this year, it depends on the approvals we get. There are at least 20 more destinations we can add. We pick the best, and we do it.”

He added that 2012 should be profitable, but fuel prices would continue to pose a challenge.

Price increases for passenger tickets were likely, he said, and urged the rest of the industry to follow suit.

“We are confident we are going to make a profit this year. We grew last year by 80 percent and this year we are planning growth of 60 percent.

“But with a continuous increase in fuel price, the price [to passengers] has to go up. There are areas where we can reduce our cost, for example hedging, or getting new aircraft that are more efficient, all of that we do and continue to do, but it is still marginal.

“Airline leaders cannot ignore [what is happening]. We have to increase the prices. This is the only thing that will have a significant impact on fuel costs. Everything else is not going to be as impactful. It is reality.”