Jazeera Airways CEO Marwan Marzouk Boodai talks to Shweta Jain about his high-flying dreams
For someone who is heading Kuwait's first and only privately owned airline, Marwan Marzouk Boodai, the chief executive of Jazeera Airways would rather be known as just another passenger on-board.
"I am just a passenger and I am happy being that way. I will leave the cockpit to the professionals. Whenever they invite me there I go in. And if they do not, I just stick to my seat," says Boodai.
Quiz him about his interest in flying and he would say: "I fly a lot as a passenger. I do not want to fly an aircraft." Boodai is a Kuwaiti businessman and currently the co-CEO of the Boodai Group, besides being the CEO of the low-fare Jazeera Airways. The group runs many businesses in Kuwait such as Jazeera Airways, City Bus, City Taxi, Limousine Services and so on.
Jazeera is a Kuwait-based public shareholding company, established in 2004, even though it kicked off operations only in October 2005 with a capital of KD10 million (Dh132m). The capital was raised through one of the most successful initial public offerings in Kuwait's history. And Jazeera thus became the only non-government-owned airline in the Middle East. FLEET EXPANSION Since then, Boodai has made Jazeera spread its wings wide and fast. The carrier is currently flying to 23 destinations - in all of 20 months and with all of five aircraft. "From our initial order of 40 aircraft up to 2014, we have received five so far and six more are expected by the end of this year. We have announced in the financial market our need for $450m (Dh1.6bn) to finance our pre-delivery payments," he said.
And Boodai's appetite for growth only seems to be growing. "By 2010, we are going to receive a couple of more aircraft. We need time to disclose to the market how many more destinations we would be adding to our network. But the aim is to double the current count," he said.
"With five aircraft we are flying 23 destinations in 20 months. With 40 more aircraft how many more desti nations can we fly to.You can do the math," Boodai said.
The airline claims to have garnered a market share of 38.2 per cent in the first half of 2007. "All those who have in the past said low cost carriers do not have a strong future in the Middle East, need to revisit the numbers and face the reality," says Boodai. FINANCE OPTIONS Jazeera, with its new orders announced in June this year, would be investing $2.1bn (Dh7.7bn) into its fleet expansion programme. "This is in addition to our earlier order of 10 aircraft," Boodai explains.
The carrier is also looking to raise $450m through financing to pay for aircraft that are due for delivery over the next two years. "We have also paid $560m (Dh2.1bn) for the pre-delivery payments for the next two years - for our additional order of 30 aircraft," he said.
As far as the financing options go, Boodai said the airline is just going to go to the banks. "That is because as per our model at Jazeera, we buy brand new aircraft, equipped with leather seats and best technology. We like to own our aircraft rather than leasing them. And operating lease option is a costly one," he said.
Meanwhile, Jazeera Airways said in September that it has postponed the listing of its shares on the Kuwait Stock Exchange to November this year.The carrier had earlier said it would list its shares in the end of September.
"We would be listing our shares sometime in November. I cannot give a specific date as of now. It depends on the stock exchange and we are going to look at that specifically when we are closer to November," Boodai said.
Plans are also afoot to list on other exchanges after Kuwait. "We would be looking to list our shares in Dubai as well as another exchange in the Middle East at a later stage," he said.
He added: "Though we know the second listing is going to be in Dubai, we just don't know when yet. Our financial advisors are working on it. It would be safe to say sometime next year." He also said that the company is still analysing if it would be on the Dubai Financial Market or the Dubai International Financial Exchange.
"A third listing would be in the Middle East. We haven't decided where as yet. We look for shareholders' interest within our network. We feel we need to be close to the home market," he said. NEW HUB ON THE BLOCK Jazeera Airways is looking to launch its third hub in Levant in the next two to three years, according to Boodai.The airline currently operates from two hubs in Kuwait and Dubai. "This year has been exciting year for us. We grew our fleet, launched our second hub in Dubai and began flights to five new cities. We look forward to an even better future," said Boodai.
He added: "There is no airline without a fleet plan. We want to make sure we set up our fleet plan just within Kuwait and then Dubai - just these two hubs. Now, we are committed to a larger order because we have opportunities with other hubs to open up. But we cannot reveal it right now as we are still at the negotiating stage. When the time is right we will announce it to the market." FOCUS EUROPE With just one European destination - Larnaka - on its map, Jazeera aims to expand its operations to Europe. "But I cannot tell you at this point an exact number of European destinations we would fly to. Simply put, our destinations in Europe and all across will have to increase.We are going to do both - increase the number of destinations and increase frequencies to existing destinations," he said.
"As we receive more aircraft we will increase the number of destinations in Europe as well. But I want to stick to the Airbus A320 and there are limitations to the distance we can fly on that aircraft," he pointed out.
Back home, however, in September Jazeera launched a few new routes - from Kuwait to Jeddah and Riyadh starting tomorrow; non-stop flights to the Maldives from Dubai; non-stop to Beirut from Dubai; and an increase in Dubai to Mumbai service to seven non-stop flights every week.
Meanwhile, the carrier serves some of the most popular destinations for both business and leisure travellers in the Middle East, North Africa, and the Indian Subcontinent, including Dubai, Beirut, Bahrain, Damascus, Aleppo, Amman, Alexandria, Luxor, Mumbai, New Delhi, Mashhad, Assiut, Cochin, and Sharm El Sheikh, Salalah, Muscat, Tehran, Larnaca, and Shiraz. He further clarified Jazeera is not in competition with legacy carriers, who follow the "East meets West" principle.
"We are focused on connecting the hubs within the Middle East. We are going to fly from point to point. We are going to add more aircraft. And they are all going to be the A320s, narrow-bodied aircraft. So it all depends on how many hubs we are going to have in the region." As far as the pricing strategy goes, Jazeera says its strategy is different from that of the competition.
"Sometimes it is 30-50 per cent cheaper than most carriers," says Boodai, adding that about 30 per cent of its bookings are made online on its website.
Boodai does not think Jazeera has any major challenges to deal with in the Middle East any more.
"It was just the regulatory issues that have now been solved and it is now history for us," he said.
"I am confident we would witness a revolution in the Middle Eastern aviation regulatory system. Just like it happened in Europe. Europe is different today from what it was five years ago," he said. PILOT CRUNCH But while most seems hunky-dory the crunch for talent and skilled pilots remains a concern for Boodai.
"It is a big concern even though we have recruited some of the best pilots in the region. Our operation is very attractive to the pilots as they can always go back home.We do not have overnight stays," says Boodai, adding that Jazeera has also started training pilots for the future.
From a current pilot base of 60 plus, by 2014, Jazeera would need at least 500 more pilots, according to Boodai.
It is time for the region's first low-cost carrier, Air Arabia, and other budget carriers planning to enter the Middle East skies, to watch the space.
But while the acting in heating up in the region's low-cost carrier sector, Boodai says he would not worry himself too much. "I am certain I would still be able to go swimming and fishing - my two favourite hobbies - in peace."
Emirates Today 2007
