ROUTES SILK ROAD: Flying East with flynas

Saudi Arabian low-cost carrier flynas has an ambitious long-haul expansion strategy, underpinned by new flights to the UK, writes Justin Burns for our sister magazine Routes News.

Saudi Arabia is best known for being home to Mecca – the capital of Islam. As a result, Muslims from all over the world aim to make this important pilgrimage at least once in their lives.  It is this steady flow of passengers that Saudi-based LCC Flynas is hoping to tap into with its new flights to Europe. The airline launched long-haul flights in April with budget flights from Jeddah to the UK.  The privately funded airline operated its first services to London Gatwick on April 8, and Manchester on May 2.

Flynas is operating three flights a week to both UK cities, as part of its ambitious ‘Global Flight Routes’ programme. It has also become the first LCC to serve the Saudi market from the UK. Last year, Flynas handled 3.3 million passengers, but it hopes to grow that to five million this year and has set an ambitious target of reaching 20 million passengers a year by 2020.

Raja Azmi, Flynas CEO, told our sister magazine, Routes News, that the UK routes were introduced after research showed there was high demand for affordable fares to popular destinations from the Middle East.  Azmi says Flynas’ main source market will be religious passengers visiting Mecca, but he believes the LCC can also start to attract leisure and business travellers.

“It’s no surprise the UK was the first country to be picked in Europe for expansion of our route network,” he explains. “London continues to feature at the top of Saudi Arabia’s most popular outbound destinations especially during summer and key holiday periods.”

Flynas was started as nasair in February 2007 when it began offering domestic and regional budget flights. The carrier was rebranded Flynas in 2013.  Headquartered in Jeddah, it is owned by National Airline Services Holding, which has a 63% stake, and Kingdom Holding holds the rest of the airline.

Azmi says he is hoping 2014 will be a landmark year for the carrier, which is aiming to be profitable for the first time in seven years.  “The shareholders have relatively deep pockets, but we would like it to be publicly owned and to be the people’s airline in a couple of years,” he explains.

Azmi notes that while expansion might seem ambitious, now is the time for the carrier to make the move into long-haul. “We had a tough time initially as we were required to do what they call public service routes. There was really no support in a sense, and we do not receive fuel subsidies like Saudi Airlines.  “I think we are ready now to move into long-haul, and we have decided to expand into this new world,” he says.

Flynas currently serves 29 destinations and chose Gatwick as its first long-haul route due to the UK capital’s popularity with Saudis.  “There is two-way traffic to Gatwick, and when we decide to look at destinations we see whether we can fill up the aircraft, especially during low season periods,” he says.

Azmi says a flight to Manchester also made sense. “We noticed there is a lot of Saudis studying in Manchester, combined with strong VFR and religious traffic too.”  The CEO believes frequencies on the routes will soon increase, and he forecasts five or six flights a week to Gatwick next year.  Flynas’s expansion includes new three weekly flights from Jeddah to Paris, Kuala Lumpur, Jakarta, Karachi and Casablanca.

“In terms of long-haul, we will be building destinations based on volume from both sides and everywhere in the world is open to us. Primarily after this we will look at Africa and India and maybe even China,” Azmi says.  The Saudi airline market has been booming in recent years, and Azmi says it grew by around 6% in 2013, with similar growth rates forecast for the next five years.

“The economy is driving growth. The propensity to travel is very high during Saudi holidays and the Saudi middle class is growing very fast,” he says.

Competition is, however, high, with heavyweight carriers Qatar Airways, Gulf, Etihad and Emirates all servicing the kingdom, along with state-owned Saudi.  Azmi explains: “It is a very competitive market, but we don’t mind competition – although it has to be on a level playing field. Saudi get fuel subsidies along with other state-owned airlines, but we are doing fine and growth has been good.”

In order to support route growth, Flynas will add more aircraft over the years to cope with new routes and destinations.  “Long-haul will be serviced by the A330 and regional routes by the A320, but we will try to stick to a single aircraft type, as we had difficulties in the past when we were running an Embraer and A320s.”

The carrier now operates 24 A320s, and leases three A330s. It is hoping to negotiate its firm order for 20 A320s, plus 18 options in favour of A330s or A350s.  In the long-term, Flynas has ambitious plans to expand its fleet to 60 aircraft by 2020, and is also in talks with Boeing over potential aircraft purchases.

With low-cost, long-haul carriers growing in other parts of the world, however Azmi is under no illusion about the massive challenge facing Flynas, but he is confident of success.  “The jury is still out on the long-haul low-cost model, but we believe it will be successful for us and there is a market out there, with pilgrimages and a growing affluent Muslim economy.

“We are based in Jeddah, a highly desirable destination, we offer affordable competitive fares and our service levels are good, if not better than others.  I am bullish that the entrance into long-haul will work for us and be a success,” he concludes.

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