Submit Press release  · eTN Team ·  Advertising  ·  eTN Awards  - Worldtourism Events    

Low-cost Kuwait airlines

Jazeera Airways expects business travelers to turn to budget airlines

Aug 15, 2009

Kuwaiti low-cost Jazeera Airways reported a loss of KWD1.26 million dinars (USD$4.4 million) in the second quarter, but predicted a turnaround in the latter part of 2009 as business travellers turn to budget airlines.

Chief executive Stefan Pichler, who took the helm at the carrier six weeks ago, said Jazeera was also on the acquisition prowl to expand its network and was looking for a new second hub after stopping flights from Dubai this year.

"We see strong bookings in coming weeks and months... We are getting more corporate demand than we were getting before," Pichler said, as companies turn to low-cost airlines to cut travel costs amid the credit crisis. "We will have some significant turnaround in the second half of the year."

"I'm very confident 2010 will be far better than 2009 because we have used this year to consolidate our business."

Jazeera, which started operations in 2005, competes with Sharjah-based Air Arabia and Dubai-based flydubai, which began flying this year.

Pichler said the carrier was keen to take advantage of lower valuations to pick up acquisitions.

"We have the opportunity to do both (second hub and acquisitions) because Jazeera has quite a good cash position right now," he said. "This is good timing, not only today but also within the next 12 months."

"The restructuring of the network from a dual hub to a single hub operation has briefly impacted revenues in Q2," Pichler said earlier in a statement.

He said that Jazeera would look for a new second hub in the Middle East, especially outside the Gulf region.

"We are more attracted in looking in the whole Middle East and not necessary so much to the (Gulf), where there is huge competition and oversupply," he said.

Jazeera posted a loss of KWD0.9 million in the second quarter of 2008. Its loss in the first half of the year came in at KWD2.2 million, it said in the statement.

The airline said revenue in the first half came in at KWD20 million, without giving comparative figures.

Jazeera, which flies to 28 destinations in the Middle East, North Africa and India, plans to expand that to 82 in the next five years.

"There was a setback in the second hub in Dubai and now we have refocused on Kuwait as a hub, in order to make sure that we can maintain the lowest unit cost operation," Pichler said.

Jazeera has a fleet of 10 Airbus A320 aircraft and expects to receive 30 more in the period to 2014.

On Saturday, Air Arabia, the Middle East's largest low-cost carrier, posted a 10 percent rise in second-quarter net profit to USD$24.5 million

Jazeera Airways expects business travelers to turn to budget airlines

Premium Partners