x Abu Dhabi, UAE Friday 21 July 2017

Abu Dhabi to Fujairah airline’s future in doubt

Eastern Express first announced it would operate the service in late 2011, but ran into regulatory hurdles which delayed its launch.

DUBAI // The future of a planned domestic airline that would operate flights between Fujairah and Abu Dhabi is in doubt, after key staff left the company.

Eastern Express first announced it would operate the service in late 2011, but ran into regulatory hurdles which delayed its launch.

Its problems were compounded when in June last year another domestic airline, Rotana Jet, launched daily services connecting the emirates.

Chief executive Alex de Vos said he had left the company shortly after Rotana Jet launched.

“I sold my share in Eastern Express,” he said. “I believe Eastern Express has moved outside the UAE to set up an airline asset management company.”

Senior management at Eastern Express could not be reached for comment yesterday.

The company ran into problems with its planned launch in January because, according to the General Civil Aviation Authority, it could not lease its first aircraft since it didn’t have national carrier status.

Former pilot Mike Carvath said the launch of Rotana Jet hit the company hard.

“Fujairah certainly wasn’t a big enough market to cater to two airlines, let alone one,” he said. “As a consequence, it came to an end.”

Travel analyst Gaurav Sinha said the launch of Rotana Jet may make it difficult for another domestic airline to establish itself in future.

“In my opinion, there’s not enough critical mass or customer demand to warrant two domestic airlines to operate within the UAE and be profitable,” he said.

“Air taxi services have high operating costs and unless airfares are extremely affordable, air travel will not be a viable alternative.

“This means landing fees, aircraft-type and operating costs need to be planned for maximum cost efficiencies and not simply clone legacy carriers. Rotana Jet has an interesting proposition of both domestic flights as well as private charters so they could potentially manage their bottom line in a more dynamic manner.

“The fact that Rotana Jet is first-to-market gives them a clear advantage that can be leveraged to build strong corporate relations, improve their market visibility and capture market share, which clearly makes the competitive space more challenging for Eastern Express.”

mcroucher@thenational.ae