Low-Cost Carriers ‘Are The Future Of Aviation’

The aviation business in the Middle East has a 100 per cent focus on profit, so much so that if you don’t make money “nobody will support you.”

That’s according to Ghaith al Ghaith, chief executive officer of flydubai, who was speaking in a media discussion at the Arabian Travel Market on Tuesday.

Sitting alongside Carsten Schaeffer, vice president MENA at Lufthansa and Randy Tinseth, vice president marketing at Boeing, the three aviation experts discussed the future of low-cost carriers and the challenges that face the industry.

“Our country [UAE] is about success and if you don’t make money, you won’t be successful,” said al Ghaith.

“Flydubai’s policy is to serve Dubai, there are still lots of untapped markets. Dubai is a hub for trade and for commerce; tourism is the icing on the cake.”

Al Ghaith had earlier talked exclusively to Gulf Business where he revealed Dubai’s low-cost carrier will launch seven new flights before the end of the year and operate five new aircraft.

Schaeffer gave a valuable European-view of the discussion, noting the importance of airlines having a good level of corporate social responsibility, and did not play down suggestions that a future alliance with Emirates was possible.

“I was surprised by the emotional outburst last year,” said Schaeffer, referring to Emirates’ executive vice president Maurice Flanagan’s remarks, when he said ‘Lufthansa hates us with a passion’.

“We’re open to alliances,” Schaeffer said. “If there is a win-win situation for both parties then yes [a partnership with Emirates is conceivable].

“We have very close ties to this region and we want to develop those.”

Speaking from an aircraft maker perspective, Tinseth noted the responsibility and importance Boeing has in the industry and how its actions can be felt across the markets.

“If we don’t have the right policies we don’t only affect aviation but we affect economies [specifically across Europe],” he said.

“The Middle East has been the fastest growing market for passengers and cargo; it really is the leading region now. We’re having issues in the United States and in Europe.”

The conversation between the three experts shifted to the importance and future of low-cost carriers.

“10 years ago, no seats on a low-cost basis were offered [in the region]. Now it’s 10 per cent and soon it will be 20 per cent,” said Tinseth.

Lufthansa’s Schaeffer agreed the low-cost model is becoming ever more important and popular across the business.

“The low-cost model can be called a low-complexity model,” he said. “The way our systems run, we have to be streamlined. If we don’t adapt [to expectations of low-cost models] we may not be around too long. We want to be here still in 50 years.”

Flydubai’s al Ghaith concurred in his support for the low-cost model and welcomed future competition from local and foreign rivals, as the new Dubai World Central airport ramps up its operations, giving greater access to European carriers.

“Low-cost is the way to run an airline, it is the future,” he said. “As far as flydubai is concerned, we are different from what you call ‘low-cost’ in Europe as we have a big focus on our service.

Al Ghaith was in part referring to the carrier’s new move to allow passengers to order their food from an online menu in advance of their flight.

“We are open to all competition [local and abroad]. The customer is bigger than us. It’s good if they have more options.”