By Arno Maierbrugger
Gulf Times Correspondent
Bangkok
Saudi Arabia’s newly rebranded low-cost airline flynas, formerly Nas Air, will begin flying to long-haul destinations from April this year in a bid to gain market share among budget carriers in the Gulf region, as well as to tap into the rapidly growing demand for air travel to and from Southeast Asia and other important overseas destinations.
The new flight map has been set up after Raja Azmi, former executive of AirAsia X, the long-haul arm of the Asia’s largest budget carrier AirAsia, took over the helm at flynas in November 2013. Azmi is a long-serving and experienced aviation expert, and he set the ambitious goal for flynas to carry 20mn passengers per year by 2020 - compared to 12mn the airline flew since its launch in February 2007 up to end-2013, or the 3.3mn it flew last year.
In Southeast Asia, Jakarta and Kuala Lumpur will be served from April 7, 2014, and the Philippines are high on a future destination list, the company said. The flights will be routed from flynas’ base in Jeddah, and pricing for long-haul tickets will be set at 999 riyal ($266).
Other new destinations of flynas will be London, Manchester, Karachi, Islamabad, Lahore and Casablanca, and further routes could include Paris, India, Nigeria, China and South Africa. For the expansion, flynas would need 60 new aircraft, a number of which will be especially fitted for strong passenger flows that are expected during the Haj and Umrah seasons. As soon as the carrier is profitable, it will seek an initial public offering “in the Arab region,” Azmi said, but didn’t disclose which stock exchange he would favour.
The expansion of the Saudi low-cost carrier clearly shows that competition in the segment is strongly growing in the Middle East. So far, the region has been undersupplied with budget carriers due to its restrictive licensing policy and the dominance of large national airlines with a very dense flight network. However, the growth of the region’s largest budget carriers, Air Arabia and flydubai, has shown the market potential.
As per passenger numbers, flynas currently ranks third in the list of low-cost carriers in the Middle East behind Air Arabia and flydubai, but ahead of Kuwait’s Jazeera Airways, Pakistan’s Airblue and Yemen’s Felix Airways.
Future competition from long-haul low-cost airlines serving Southeast Asia will also likely be felt by the national carriers there, of whom all but one (Singapore Airlines) suffer from sustained and significant operative losses.
Philippine Airlines, Garuda Indonesia and Malaysia Airways all have flights to Saudi Arabia on their route maps, but pricing would be drastically undercut by flynas. Apart from that, and unlike most low-cost carriers in the US or Europe, flynas offers premium seats for a slightly higher price and not just no-frills. However, it remains to be seen whether Middle Eastern budget carriers are potent enough in the long-term to deal with still prevalent issues that continue to impact the regional market such as closed skies policies, ownership restrictions, and complex visa requirements.