Saudi Arabia's Flyadeal looks for more A320 capacity ahead of Neo deliveries
CEO Con Korfiatis says international flights could begin this year, and start with routes 'closer to home'
Despite launching just under two years ago, Saudi Arabia's low cost carrier, Flyadeal, has gained a lot of ground. With a fleet of 11 Airbus A320s, it flies to eight cities on 14 routes, with around 80 flights a day, translating to around 15,000 seats per day.
But in an interview with The National on the sidelines of the Aviation Festival in London, the airline’s chief executive Con Korfiatis said the airline is undergoing “a changeover period”.
Last December, it placed an order for 50 Boeing 737 Max aircraft that were meant to begin delivering this year.
In July, however, after the Max aircraft was grounded following two fatal crashes that claimed the lives of 346 people, Flyadeal ditched the order, worth $6 billion at list prices.
Instead, it ordered 30 A320neo aircraft, which begin delivering in 2021, with the option to take another 20. Mr Korfiatis said the new jets will fly across its domestic network and eventually, once launched, on its international network. The airline will come to market in the first quarter of next year to begin looking at financing options for the aircraft.
“We're looking for some interim fill, additional aircraft to cover and give us continued growth for 2020,” he said.
Asked what type of aircraft this would be, Mr Korfiatis said it wouldn’t be more Neos, because there is too much demand in the market for them and Airbus has had issues with engine delays for the new aircraft.
Instead, he will look at adding up to five A320ceos to give the airline growth through to 2021, when the Neos start delivering.
Mr Korfiatis said Flyadeal switched to an all-Airbus fleet because Boeing had not given the airline industry a concrete date when the Max would begin flying again.
“Our order book was around getting aircraft flying as soon as possible. We were originally looking at having Maxes flying by now. With the uncertainty and not a clear answer on when that will change, unfortunately the decision was made just from a timing point of view,” he said.
“It wasn't at incremental capacity we were looking at, it was growth and we're still a young airline and need to grow. There's lots of markets that are begging for us and we still don't have a comprehensive domestic network, and we don't fly internationally. We just felt at this point in our lifecycle, it would be very damaging to delay growth while we wait for an outcome when we didn't know when that may be.”
Although the airline industry is still in the dark as to when the model will be fixed, Mr Korfiatis is confident Boeing will resolve the issue.
“We never had any doubt about that but it was all about the timing and the impact it would cause us strategically, and in the short-to-medium term with the uncertainty,” he said.
Flyadeal wants to branch out and go from flying only domestic services to flying internationally. Mr Korfiatis anticipates this to be at the end of this year, or next year at the latest. The airline is in the process of evaluating which global markets it will serve.
“It’s safe to say the initial set of international flying will be closer to home rather than going really far away early on. It helps with aircraft utilisation and recoveries if you need to change aircraft. As we grow in size and fleet, progressively, we'll take the sectors we fly to be longer,” he said.
Mr Korfiatis said that he would look at other aircraft in the A320 family, such as the longer A321XLR, for international flights.
“There's variants of A320 family that give longer range. And I think over time, definitely that would be of interest to us,” he said.
“Right now we have a very big operation in Jeddah-Riyadh with very high load factors and we could easily fill a larger aircraft. So an aircraft that has larger seating capacity is also going to be of interest to us over time as well.”
An A321XLR could fly non-stop from Jeddah to London, giving the airline the extra range it needs to become an international operator.
The Flyadeal boss welcomed reports that the kingdom could begin issuing tourist visas as early as the end of this month, but said it will take time for Saudi Arabia to become a tourist hub.
“The kingdom has a huge outbound market and a huge inbound market that's either a worker market or religious traffic and having lived there for a few years, the country is spectacular and has a lot to offer as a tourism destination as well,” Mr Korfiatis said.
“There's a huge marketing effort and brand build that's going to be required but I'm confident with what's there. There's definitely something on offer and that will build over time and I look forward to playing a part in that.”
Updated: September 5, 2019 08:59 PM