May 02 2012 |
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CEO says nas air IPO, hub plans on hold
By Sona Nambiar Riyadh-based low-fare airline nas air has put on the back-burner plans to establish a second hub, probably in Dubai, and to launch an initial public offering of shares as a difficult year in 2011 forced the carrier to re-assess strategy, its chief executive said."Going public is something our shareholders are definitely keen on going ahead with. We were aiming for that and made an announcement at one stage. But we saw a different turn of events in 2011, such as the Arab Spring, which made our positions very difficult and created burdens for the company," Francois Bouteiller told Zawya in an interview.
"Egypt saw a decrease in business but is now picking up again. We had to temporarily suspend our operations to Syria, which is an important market. But we were able to react to the situation with our flexible approach and re-accommodate additional flights to the vicinity and around Syria since we already serve those destinations," Bouteiller said.
Saying that the first quarter of 2012 was relatively better for nas air , the chief executive said: "The changes that were brought to the network were very positive and we hope to continue on that trend. Our sales increased by 35% year-on-year and we were able to increase our flights and passengers with the same number of aircraft."
Launched in Saudi Arabia in February 2007, nas air is the country's first and only low-cost carrier and currently the only privately owned airline in the kingdom. In June 2010, NAS Holding chairman Ayed Al Jaeed told shareholders that the company had attained regulatory approval to become a joint-stock company with capital of USD 267 million, in preparation for the launch of an IPO. He added that it was "one step further on the road to putting the company's shares for public subscription within the next few years."
In December 2010, the airline's then chief executive Simon Stewart told media that the airline was targeting an IPO by 2012-2013 and was also looking at launching a foreign hub, most likely in Dubai, by early 2012.
Bouteiller told Zawya on Tuesday that things have changed on that front. "[The second hub] is not on the agenda," he said, but was unwilling to elaborate. He was appointed chief executive in February 2012.
Nas air operates 500 weekly flights with a young fleet of 14 aircraft and covers 21 destinations both within and outside Saudi Arabia, according to its website. Since the launch of operations, it has transported more than nine million passengers through more than 90,000 flights. It currently operates five non-stop flights between Dubai and Dammam, Gizan, Jeddah, Madinah and Riyadh.
"We have placed orders for more aircraft and some have been delivered," Bouteiller said. "As far as new destinations and networks are concerned, we should be in a position to announce them at a later stage in 2012. But at the moment, we prefer to consolidate our existing networks.
"We have stopped most of our flights to India because we did not have the right aircraft. But we are finding ways to maintain our presence in India."
Bouteiller said he is also looking forward to the opening up of Saudi skies this year. By September, the General Authority for Civil Aviation (GACA) in Saudi Arabia is expected to clear new carriers for takeoff and grant airline licenses to operate both local and international flights. As many as 14 companies have applied for such licenses.
National carrier Saudi Arabian Airlines and nas air currently serve a domestic market of around 27 million people. "The Saudi market is strong yet under-served. Competition will make our life a bit easier by reducing the operating costs in terms of fuel and infrastructure. We encourage competition but on a level playing field," Bouteiller told Zawya.
© Zawya 2012
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