Al Ghaith Says Flydubai Can Keep Growing

Dubai Air Show » 2013
Flydubai CEO Ghaith Al Ghaith
Flydubai CEO Ghaith Al Ghaith
November 15, 2013, 11:59 AM

Ghaith Al Ghaith, the CEO of Flydubai, Dubai’s low-cost carrier, has a reputation for being tight-lipped. Observers would be unwise to mistake this reticence for a lack of activity: Flydubai has been diligent in adding aircraft and routes ever since its first flight to Beirut in 2009 and, as of September, Dubai’s second airline, operated to 66 destinations, from Yekaterinburg in the north to the Maldives in the south, Belgrade in the west and Colombo in the east.

“Flydubai’s main goal is to provide travel to underserved markets within a five-and-a-half-hour flying radius of its hub in Dubai. We have seen enormous demand in Russia and Ukraine for travel…Half of our Russian destinations did not previously have a direct air link to Dubai,” Al Ghaith said. Flydubai made headlines at the Farnborough 2008 airshow by ordering 50 aircraft before its first flight. By cooperating and competing with Emirates, it has seen success: in 2012, it saw revenues of $756 million and profits of $41 million. Its $1.2 billion fleet financing also earned market plaudits.

As of late September, Flydubai had 31 Boeing 737-800NGs, the sole type, in its fleet. “The remaining order[s] will be fulfilled by 2016,” said Al Ghaith, who disappointed analysts and journalists at the 2011 Dubai Airshow by refusing to place orders for more aircraft. “Flydubai serves more than 65 destinations across its network. This year alone we have announced 16 new destinations and we are planning to make further announcements.” Flydubai’s maiden flight to Salalah, Oman, its 60th destination, was made in May, the same month Qatar Airways touched down there for the first time.

In September, Flydubai announced flights to Chisinau, Moldova, would begin on November 20. That month its first flight to Kiev touched down, and it was operating to 66 destinations, including four in Ukraine. “Flydubai operates an average of 1,200 flights a week,” said Al Ghaith. “With the launch of new destinations and an increase in frequencies to existing destinations, we expect this number to grow.”

Attracting Tourists

Flydubai is becoming popular with Eastern European and Russian tourists looking for Indian Ocean sunshine. Speaking in March at the Moscow International Travel and Tourism Exhibition, Al Ghaith said, “Russia and Ukraine are two of Flydubai’s key markets. We have seen steady passenger growth over the past couple of years in both countries. Not only is Dubai a popular destination, but we are seeing more and more passengers connecting to Flydubai’s services to Sri Lanka and the Maldives.”

Although Flydubai can’t match Emirates in terms of transit passengers, thought to be 70 percent of total traffic through Dubai International Airport (DXB), its numbers are impressive. “In the past 12 months, 26 percent of Flydubai passengers have used DXB to connect to another flight on our network,” he said. “Our network covers the following regions: the Gulf Cooperation Council (GCC), the Middle East, Europe, the Indian subcontinent, the Caucasus, Central Asia and Africa. We will continue to explore opportunities within these areas.”

Flydubai operates out of Terminal 2 at DXB. Passenger numbers for the carrier’s GCC network grew by 63 percent in 2012, with the total market for all airlines growing by 21 percent, the company said in February. In the CIS, Flydubai’s passenger numbers grew by 72 percent, with the total market for all airlines growing by 28 percent, it said.

The airline recently added business-class seats on a number of flights. “With several of our destinations, such as Juba, Donetsk and Skopje, we are offering our customers the only business-class option on these routes. We launched business-class-based on the feedback of our passengers, and we expect demand from our existing customers, along with attracting new travelers on our routes,” he said.

Both Emirates and Flydubai operate to several of the same destinations, such as Colombo and Istanbul. While there is clearly scope for price differentiation for travelers seeking to travel to or through Dubai, more than two thirds of Flydubai’s routes give travelers a new opportunity to connect with Emirates in Dubai. “Emirates and Flydubai are independent airlines. While we may operate some of the same routes, more than 45 of our 66 destinations did not previously have direct air links to Dubai.”

It is believed that neither Flydubai nor Emirates are interested in moving to Dubai World Central without the other, given the connectivity that would be lost. Flydubai’s growth has taken place very much with the complementing Emirates’ route development in mind. It was long thought to be the most likely candidate to move to Dubai World Central to take the pressure off DXB.

However, Al Ghaith rules this out for now. “Dubai World Central is the new frontier of aviation in the UAE, [but] Flydubai does not have plans to move its operations at this stage. Our current home at Dubai Terminal 2 is convenient for our passengers while offering us operational efficiency. With the extension due to open in 2014, there is enough capacity to support our continued route network expansion,” he said.

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