Sunday, Sep 26, 2010
(Adds comments, details, background.)
RAS AL KHAIMAH, U.A.E. (Zawya Dow Jones)--A re-branded Rak Airways, the airline of Ras Al Khaimah in the United Arab Emirates, will restart flights Oct. 10, expecting a pick-up in demand for international travel to help the carrier break even in its first year, officials said Sunday.
The airline will start with four weekly flights to Jeddah, Saudi Arabia and Calicut, India.
"Conditions have markedly improved lately, to the point, international passengers' demand has surged," said chairman Sheik Omar bin Saqr Al Qassimi at a press conference. "At the level of operating expenses, we are planning to break even at the first year," added Chief Executive Officer Omar Jahameh.
Rak Airways was set up in January 2006, but suspended fight service just over a year ago--keeping its chartered business--as a global economic downturn hit the airlines industry. In June, Al Qassimi said those conditions had "sufficiently abated."
Al Qassimi said Sunday he was encouraged by "good news from the world and the U.A.E. economy." Rak Airways will focus first on serving U.A.E. residents--by providing a free bus service between the Ras Al Khaimah airport and Dubai--and on routes that are "under served."
Ras Al Khaimah, the fourth-largest member of the U.A.E., is building five-star hotels and expanding its airport in a bid to attract foreign investment into the emirate. The rebirth of its airline will "play a pivotal role in the promotion of Ras Al Khaimah as a destination in its own right," Al Qassimi said.
The U.A.E.'s other airlines are Dubai-based Emirates Airline--the Middle East's largest carrier--Abu Dhabi-based Eithad Airways, and Sharjah-based low-cost carrier Air Arabia. Dubai's government launched a low-cost carrier last year, Flydubai.
Rak Airways flights to Jeddah and Calicut will start at 10 U.A.E. dirhams per seat ($2.7), including one baggage and a meal, but Rak Airways is not a low-cost airline, chairman Al Qassimi said. The model is based on cost-control, he said.
BOEING FLEET
The carrier has a fleet of three leased aircraft, two Boeing 737-400s and one 757 which it will use for chartered service.
"We are now negotiating access to further aircraft," said CEO Jahameh, adding the carrier would keep its options open to both lease and buy aircraft.
It is in talks with Boeing to finalize a contract signed in 2008 for four 737-800 aircraft and options for two more. Jahameh declined to say what the discussions centered on.
"The contract is very flexible from both sides," chairman Al Qassimi said, adding that Rak Airways will likely need the aircraft in one year, when it will also need financing.
"We will go to the financial markets and see what the options are at the time," he said.
Chief executive Jahameh said an initial public offering "is not an option" now, but would be re-evaluated later. Sharjah's Air Arabia listed on the Dubai Financial Market in 2007, becoming the third publicly-listed airline in the Middle East and North Africa after Karthago Airlines and Tunisair, according to Zawya.com.
-By Nour Malas, Dow Jones Newswires; +9715 0 2890223, nour.malas@dowjones.com
Copyright (c) 2010 Dow Jones & Co.
(END) Dow Jones Newswires
26-09-10 1015GMT
