Kuwait-based Jazeera Airways plans to open a second hub next year in the Middle East.
Jazeera Airways to open second Middle East hub
Kuwait-based Jazeera Airways plans to open a second hub next year somewhere in the Middle East after recently pulling out of Dubai International Airport, its new chief executive said. Stefan Pichler, who joined Jazeera Airways as CEO on June 21, said the pullout of its second hub in Dubai was a strategic decision, and put to rest reports that it had been pushed out by the Dubai Government to free up competition for its budget upstart, flydubai. "The shareholders decided against a hub in Dubai," he said. "It seems their expectations had not materialised. There are other areas of expansion, however ? one thing is for sure, we won't stay as a one-hub airline." The comments come after news reports earlier this year said Jazeera was suspending flights from Dubai to several destinations from June because the UAE government had placed new restrictions on the Kuwaiti airline. "We would prefer to continue to offer non-stop services to many destinations from Dubai but unfortunately regulatory changes in the UAE have meant that it is no longer economical for us to do so," a Jazeera spokesman told local media. The statements were immediately disputed by the General Civil Aviation Authority (GCAA). The authority said it had only informed the Kuwaiti airline it could no longer fly from Kuwait City to Dubai and then on to Beirut, but that it was free to fly elsewhere. "We did not ask them to stop these operations," said Saif al Suwaidi, the director general of the GCAA. The flights from Kuwait to Beirut via Dubai had been granted under a one-time provision, even though UAE-Kuwait air rights agreements did not allow the services, the GCAA said. This year, the provision lapsed. The issue was a short-term problem, Mr Pichler said. "If there was a strategic intent to build Dubai as a second hub, such as allocating 40 to 50 per cent of our total seats, then we would have found ways to accommodate that." Jazeera will instead focus on a country outside of the Gulf for its second hub, opting instead for a country with a greater population density and lower competition, he said. Jazeera's second hub strategy comes as the region is experiencing a flowering of budget air travel. Air Arabia became the first budget carrier in the region in 2003, followed by Jazeera in 2005 and flydubai's launch in June. But efforts to franchise these brands into new markets has not come without challenges. Jazeera battled with the cost of having two bases, and never managed to establish crew and engineering staff out of Dubai. In the first quarter, Jazeera posted a loss of 982,462 Kuwaiti dinars (Dh12.5m). Air Arabia set up a second hub in Kathmandu, operating as flyyeti.com, in January last year. But months later it suspended the operations, citing operational challenges and political instability in the country. It now operates Air Arabia Maroc out of Casablanca airport. Jazeera opened the hub at Dubai International's Terminal 1 in 2007, as the UAE was experiencing a massive boom in air travel. It eventually operated flights between Dubai to Sudan, India, Lebanon, Bahrain, the Maldives and Oman. firstname.lastname@example.org