Jazeera takes to the skies

Jazeera Airways is to start flying scheduled services in November, operating two newly built A320s. The Kuwaiti low-cost carrier, which is 100% privately owned, will also add another two A320s next year, as it ramps up its operations and network.

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By  Neil Denslow Published  October 1, 2005

Jazeera Airways is to start flying scheduled services in November, operating two newly built A320s. The Kuwaiti low-cost carrier, which is 100% privately owned, will also add another two A320s next year, as it ramps up its operations and network. The airline was originally due to start flying earlier in the year, but the launch was delayed after a leasing deal fell through. However, the carrier will receive two A320s in the coming weeks, which will enable it to begin flights. “I think what [the delay] has enabled us to do is to plan the launch of our business very well,” said Iain May, vice president, finance, Jazeera Airways. “I came out here a year ago, and all we had was US $35 million in the bank and nothing else. To have got from that stage to actually launching in a little over a year is about the right preparation time.” When the carrier begins flying from 16th November, its timetable will feature daily flights to Bahrain, Beirut, Damascus and Dubai, and a three-times-a-week Amman service. Prices will be sharply lower than what is available in the market at present. Emirates, Kuwait Airways and Gulf Air, for instance, all charge more than KWD 100 ($342.38), including taxes and surcharges, for a return ticket to Dubai, which is just 90 minutes’ flying time away. Jazeera, by contrast, will charge from KWD 66 ($225.97), including taxes, for the same trip. This beats the flag carriers, but not Air Arabia. It offers fares from KWD 46.24 ($158) all in, although this is to Sharjah Airport, which is a 30 minute drive from Dubai. Like Air Arabia, Jazeera will be following the low-cost model, by combining a no-frills service, high fleet utilisation and a heavy use of outsourcing and IT. The onboard service, for instance, will feature catering, but this has been outsourced and passengers will have to pay for what they want to have. “This will turn a cost into a revenue stream,” noted May. The airline has also outsourced all of its maintenance both onsite and offsite to Lufthansa Technik. Ticket sales, meanwhile, will be managed by Navitaire’s Open Skies reservation systems, with the airline aiming to utilise its website, call centres and travel agents as distribution channels. Passengers within Kuwait can also book by sending an SMS message to *177#. “This is an interesting extra revenue stream [for the airline], as we get a certain percentage of the phone bill from Wataniya Telecom,” added May. The future plans for the airline are to rapidly add more aircraft and more destinations. The carrier is due to receive two more A320s next summer, and it also has options for four more aircraft. RfPs have also already been issued for financing for the fifth and sixth planes. So far, Jazeera has bought all of its aircraft outright using a combination of Islamic and conventional financing. However, it expects to use leasing as well in the future. “The decision to buy was purely cost-driven, as we had negotiated good prices with Airbus and good rates with the banks,” said May. “I have no doubt though, that over the next two-three years leasing will become part of the mix.”

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