KUWAIT: The airline industry in the Gulf region is witnessing a robust growth of around 14 percent today, which is stronger than Europe or the US, and the Kuwait market is an important part of that growth story, said Sudhir Sreedharan, flydubai’s Senior Vice President, Commercial Operations (Indian subcontinent, GCC and Africa). Talking to Kuwait Times in an exclusive interview, Sreedharan said the Kuwait market is a significant part of flydubai’s growth strategy as it expands its footprint in the region.
Sreedharan was in Kuwait to attend a mall promotion roadshow organized by flydubai at Avenues Mall from Oct 14-17. Speaking at length about flydubai’s growth and expansion since it started operations as a Dubai-based airline in 2009, Sreedharan elaborated on the importance of the Kuwait market to the airline.
“flydubai’s advent into Kuwait is one of the most robust stories that we have in the GCC. We started operations to Kuwait in 2010 with two flights a day, and in less than five years’ time, we have grown to 12 flights a day. This would not have been possible without the support of the Kuwaiti authorities and the people,” said Sreedharan.
On the launch of the Sheikh Saad terminal in 2013, he said, “we took flydubai service to a new level with the launch of this dedicated terminal. Today, a passenger takes less than five minutes to come out of the aircraft at Sheikh Saad terminal and get into a taxi. So the service and seamlessness that we guarantee onboard and on ground to Kuwait customers has gone to a whole new level. The exclusivity and the seamlessness of Sheikh Saad terminal is a fantastic story,” he said.
“The Gulf region is growing more strongly than Europe or the US today,” he said, quoting the latest Carper change to CAPA report on the aviation industry. “Growth in this market is about 13 to 14 percent, which is the strongest at the moment and Kuwait is an important part of that growth. If we look at our numbers for the first half of 2015 compared to the same period last year, we have grown about 22 percent,” he said.
According to Sreedharan, Kuwaiti travelers are extremely discerning and very adventurous. Unlike the usual GCC travel which is predominantly point-to-point, Kuwaiti customers opt to travel to previously underserved markets. “Of the 98 cities that we fly into today, 67 of them were previously underserved from Dubai. The amount of Kuwaitis travelling to these 67 destinations is a story that is quite commendable,” he pointed out.
Kuwait is not only growing homogenously as Kuwaitis continue to travel to Dubai, but they also venture out to test new markets such as Eastern European cities. This expansion of footprint allows us to invest and grow in this market,” he said.
From 2010 till date, flydubai has carried around 2.8 million passengers in an out of Kuwait. “This number endorses the fact that we fly 12 flights a day from Kuwait. We would want customers to think of us the moment they think of Dubai. They could go to the airport, park the car, buy the ticket and practically take off. That is how the whole travel arena is evolving today. That is where our space of growth is as compared to any other legacy carrier. People continue to believe in us and we remain a popular airline,” he explained.
Over the last six years, flydubai has built up a fleet of 49 change to 50 new aircraft and will take delivery of more than 100 aircraft by the end of 2023, all of which will be Boeing 737-800s. “We took delivery of 15 change to 50 Boeing 737-800s we ordered in 2008. In 2013, flydubai ordered another 111 aircraft including the new Boeing 737-800 max. Next year, we will take delivery of eight more aircraft and will launch eight to 10 new destinations. By the end of 2016, we are looking at a network of 100-110 destinations with 58 aircraft,” Sreedharan said. flydubai has created a network of more than 95 destinations in 45 countries, with 18 new routes announced in 2015
The airline has opened up 67 new routes that did not previously have direct air links to Dubai or were not served by a UAE national carrier from Dubai. It has a workforce of more than 3,000 employees from 111 nationalities and operates an average of 1,600 flights a week.
“Complementing this growth is the opening of a new hub at Dubai airport. We will start operations from Dubai World Centre (DWC) starting with the winter schedule this year and operate 70 flights a week. Along with two Kuwait flights daily, we will also operate flights from DWC to Doha, Bahrain, Muscat, Beirut, Amman, Chittagong and Kathmandu. Customers from Kuwait will have the ability to go to central Dubai or Jebel Ali or south of Dubai which is where the next phase of development is taking place today,” he informed.
“We see it as a plausible and solid case to launch business class in our flights. Of the 98 cities we will serve by the end of this year, 67 of the cities were previously underserved. From those cities to Dubai, there was either no product or the product was not of the right quality or not affordable, and to those cities, business class is definitely the only option for business travelers who wish to come to Dubai,” he said, explaining the rationale behind launching a business class on flydubai.
“In the existing network where we have a competition in business class, we find that there is a profile of customers who want to see differently and to be seated differently. And we have been able to deliver the service the way they want. Not only we deliver it as a product, but we have been able to ensure that we get the customers to endorse it,” he said.
flydubai launched its business class in 2013 with 162 seats in economy class and 12 in business class. According to Sreedharan, the Boeing 737-800 is the most successful and sturdy plane ever built by Boeing, which is also very fuel efficient.
Oil price scenario
Talking about the fuel price drop and its possible impact on airfares, he said: “It is a double-edged sword.” For airlines, a drop in fuel prices is positive because fuel accounts for about 30 percent of the operating costs. “But average airfares have come under pressure now. So the right revenue per seat that should have been complemented by the oil price drop is not exactly there,” he explained.
“The fuel price drop has helped flydubai in its overall positioning in the industry. Our customer base continues to grow,” he said. “We see fuel prices remain suppressed in 2016. But more importantly, our focus is to ensure that in each market, our guests get the right price. We remain in that affordable segment and continue to stimulate profit,” he added.
“Fares are the reflection of the market irrespective of the fuel costs. Fares do not go up just because fuel prices go up or vice versa. We, being a part of this market, have to ensure that fares are in line with what the market can afford and in line with our business policy of ensuring an affordable stimulatory fare,” he concluded.
By Sajeev K Peter