Oman Air has officially announced that it has obtained approval from the Govt of Oman to launch a low cost airline operating primarily to the Indian Subcontinent and selected domestic routes to offer a more cost effective product to its core clientele.
In addition, the airline too revealed that the 3 new long haul routes that it intends to launch to help boost revenues and profitability include Casablanca, Manila and Jakarta.
WY has yet to disclose the business plan for this new venture however there are two options it can look at:
Option 1 – the low risk approach
Convert many B738s from its existing fleet from a dual class configuration to an all economy class layout seating 180-189 passengers and operate them on ISC routes which have minimal business class demand such as CGP, LHE, ISB, PEW, COK, CCJ, TRV, LKO, HYD, BLR, MAA, CMB and KTM. Routes such as KHI, BOM and DEL though should be maintained as a 2 class service as the airline does get a small amount of premium passengers bound to Europe in particular. If WY is in desperate need of planes to propel growth, they can easily dry lease from Fly Dubai or Jet Airways (JetKnonnect) few all Y class configured B738s. In addition to the ISC routes, others that should be served with these configured aircraft include KRT, DAR and ADD.
Option 2 – the fresh attacking approach
Order a bunch of larger Boeing 737-900ERs from Boeing to be configured in all Y class layout which would seat 230 passengers i.e. at least 27% more than the B738s and the cost to operate these aircraft would be about 8% higher at the very most which is off set by the on board capacity increase. This is the same successful formula adopted by airlines such as GF and QR who use the A321s (direct competitor to the B739ER) instead of A320s (direct competitor to the B738) on higher volume, lower yielding routes to the ISC region due to the better performance economics that the bigger planes provide. Etihad too has followed suit by exchanging an order of 7 A320s for A321s in 2012 which was announced in Q3 2012.
Yes ordering B739ERs might require a fresh injection of large capital from the Omani Govt however this too can be off set if WY negotiate with Boeing to exchange B787-800s that it has on order for B 737-900ERs. Three B739ERs can be obtained for the price of 1 B787-800 of which WY has ordered 6 in total.
Now as far as the plan is concerned with regards to launching MNL, CGK and CMN, yes there is good potential for the first 2 mentioned (MNL/CGK) but none for CMN because it’s a highly seasonal market and year round S/F are not high enough to warrant a new GCC carrier entering the market segment. In addition, WY does not have a large SE Asian market to adequately feed CMN which QR/EK/EY do.
As for MNL and CGK, WY needs to first reconfigure at least 2 of its A333s into a high density J/Y configuration in order to make these routes work as the current premium heavy configuration of its A330-200 + A330-300 fleet are not suitable at all for either routes. A maximum of daily service is required for MNL and CGK each to be operated nonstop from MCT preferably using an A333 configured to hold 18J (sleeper seats in order to main product consistency across its wide bodied fleet) plus 296Y. Both CGK and MNL will provide a decent amount of high yielding O&D traffic bound to MCT as well as help majorly feed its multiple daily GCC/KSA bound services. MNL too at times can help contribute passengers on services to ZRH, LHR, FRA, CDG, MUC and MXP for which there is high demand year round.
IAG the owner of British Airways and Iberia has officially announced that it has exercised options that it held with Boeing for the purchase of 18 additional Boeing 787s for British Airways. The exact breakdown of the sub models is yet to be known however it is expected a majority to be for the larger B789 version. IAG too disclosed that it has also secured additional delivery slots during the later part of the decade for Iberia as it will use the B787s to gradually replace IB’s fleet of A332s and A343s in particular.
Alitalia has officially announced that it will be further increasing its services to AUH-Abu Dhabi, UAE in cooperation with Etihad as both the airlines look to slowly tap into the high demand FCO-Asia market segment. AZ’s current schedule of 4 weekly flights will be increased to 5 weekly nonstop using an A330-200 effective 11JUN.
Japan Airlines is seriously contemplating placing an order with Airbus for 20 of its largest A350-1000X (according to Japanese media) as the airline’s CEO announced that it was high time the carrier moved away from its total reliance on having all Boeing fleet. JAL would use the A351s to replace B772ER and B773ER on services to USA and Europe.
Lufthansa has officially announced that it is seriously studying the potential of creating a new long haul low cost airline as the carrier finally acknowledges that it has gradually losing a lot of market share bound to the Asia-Pacific and Indian Subcontinent region to the Middle Eastern carriers which need to be tackled. No hints of fleet type nor intended destinations nor possible aircraft configurations being mentioned.
There are two things one feels that LH can do here instead of creating a whole new airline for this very purpose:
1. Order a bunch of B777-300ERs (which it already has done for SWISS) and configure them in more or less the same manner as Air Canada has for high density long haul operations i.e. 430-440 seats in a J / Y class configuration. Routes that can support such a high density layout include BKK, MIA, PEK, ICN, DEL, KUL, JNB, EZE and GIG.
2. If ordering a dedicated fleet of B77Ws (over a dozen required minimum) for this type of service is too capital intensive, then it could look into reconfiguring many of its B744s into a high density 2 class layout seating 470-480 passengers. The upper deck can be exclusively for business class and the lower deck for economy passengers only.
Kenya Airways has officially announced that it shall be launching new nonstop services to Abu Dhabi, UAE effective 01JUL13 as the carrier enters into a strategic cooperation pact with Etihad which will involve code sharing beyond AUH to Australia and GCC destinations mainly. KQ will operate 3 times per week nonstop to AUH using a B738 alongside EY’s daily A320 service with the below mentioned schedule:
KQ 316 Dep NBO1925 Arr AUH 0105+1
KQ 317 Dep AUH 0205 Arr NBO 0555
In addition to the above, KQ too disclosed that the first 2 routes to be operated with its new Boeing 777-300ER fleet shall be LHR and AMS effective 04NOV13.
Ethiopian Airlines has officially announced that due to high demand for both O&D and intra-Africa traffic on board its Muscat flights, it will be increasing frequencies on this sector. Services will go up from 4 to 5 weekly nonstop flights in code share with Oman Air using a B737-700.
Oman Air need to launch their own MCT-ADD flights at a similar frequency level of ET. The GCC-ADD market segments are very big in volume and much higher yielding than DAR/NBO. In addition, WY can attract feeder traffic from ADD at better yields to India, BKK, KUL and KHI than it currently does so out of Europe. An initial 4 weekly B738 operated service would work out just fine as long as it ensures that UAE, KWI, DOH, BAH, BOM, BKK and DEL in particular are connected nicely in both directions.
Wizz Air one of Europe’s largest low cost airlines has officially announced that it will entering the Middle East market fray by launching 4 new routes to Dubai’s new Al Maktoum International Airport effective 28OCT13. The main highlights are as follows:
*All flights to be operated nonstop using an A320
OTP/DXB – new 3 weekly frequencies
BUD/DXB – new 4 weekly frequencies
IEV/DXB – new 4 weekly frequencies
SOF/DXB – new 3 weekly frequencies
India and Singapore Governments have recently concluded signing an amended air bilateral accord giving increased access to airlines of both countries to boost flights as air travel demand has risen considerably between both countries since 2010. According to the new accord, the weekly capacity can be increased on both sides from the current 23,000 seats to 29,000 effective IATA Summer 2014.
In 2012, the demand between India and SIN was as follows:
BOM - 530,000
MAA - 515,000
DEL - 385,000
BLR - 195,000
CCU - 90,000
HYD - 60,000
COK - 50,000
TRV - 50,000
AMD - 20,000
Taking this into account, DEL-SIN is already a double daily B777 operated service by SQ where as MAA is only a daily A333. MAA should be the one that should be really increased to double daily A333 at least as the market demand is definitely there along with cargo. In addition to O&D, SQ would also get a good chunk of transfer traffic from MAA to KUL, China, HKG and Australia where there is good sized demand to tap into especially for KUL !
Fly Dubai has officially announced a major expansion plan for its route network for the current Summer 2013 season of which the main highlights are as follows:
Dushanbe – new 2 weekly nonstop service
Osh - new 2 weekly nonstop service
Colombo – frequencies increased from daily to 10 weekly
5 new destinations in Russia to be launched from 20SEP13 which are including Rostov, Volgograd, Dniepropetrovsk, Odessa and Krasnodar all operated twice a week each respectively