Jazeera says second hub outside GCC is favourable

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Jazeera AirwaysJazeera Airways has ruled out establishing its second hub in a Gulf state - confirming a growing industry focus on non-GCC Middle East and North African countries.

Fierce competition within the GCC has made locations outside the region more favourable, Stefan Pichler, the Kuwaiti carrier's CEO, told Emirates Business.

The airline will announce the site of its second hub in the next six months, he said.

"We are looking into other hubs not necessarily in the GCC countries. If you look at the population and number of airline seats in the GCC, you have about 28 per cent of the Middle East population but 80 per cent of all seats supplied by Qatar, EtihadEtihad and EmiratesEmirates.

"But if you turn it around, in all the other Middle East countries outside the GCC you have about 70 per cent of the population but only 20 per cent of the airline seats. So, of course, our interest is more in the non-GCC Middle East countries and also North Africa.

"We are working on a second hub and our plans are pretty advanced. We are in the good position of not having to reveal it now, we can finish our homework and then launch it. We will announce the next hub within the next four to six months."

Jazeera AirwaysJazeera Airways stopped operating flights from Dubai earlier this year and focused on consolidating its hub in Kuwait. But with expansion plans under way the airline remains committed to its multi-hub approach.

Pichler said pulling out of Dubai was a very reasonable move because the airline wanted to concentrate on building up Kuwait as its major hub.

"Kuwait is our domestic hub. What we have achieved is that from July we have become the biggest carrier in Kuwait - bigger than Kuwait Airways in terms of aircraft movements. We are trying to improve our market share in Kuwait. More market share means more pricing power, which means more connecting traffic.

"It is a very reasonable thing to do. So the impact of pulling out of Dubai was lower operating costs because you only have one GCC hub instead of two."

Jazeera's decision to look outside the Gulf for its second hub mirrors current industry trends.

Last month Sharjah-based low-cost carrier Air ArabiaAir Arabia said it would launch a new budget airline with an Egyptian partner, enabling it to open a third hub and diversify away from increased pressure in its home GCC market.

The Arab world's largest listed airline by market value said it had set up the joint venture firm with Egypt's Travco GroupTravco Group.

A spokesman said: "The new carrier will serve Europe, the Middle East and African markets and will represent Air ArabiaAir Arabia's third hub after the UAE and Morocco."

Air ArabiaAir Arabia operates in Morocco from Casablanca and in August it planned to set up a new hub between its Sharjah base and North Africa to diversify its revenues and boost its catchment area.

By Sean Davidson

© Emirates Business 24/7 2009