Growth of budget carriers in Middle East among world’s fastest

Low-cost carriers in the region, including the likes of flydubai and Air Arabia, increased their capacity by 17.7 per cent in the 12 months ending in June, putting them second behind Asia.

A flydubai plane on the tarmac at Terminal 2 of the Dubai International Airport. Low-cost carriers (LCCs) in the region increased their capacity by 17.7 per cent in the 12 months ending in June.  Randi Sokoloff / The National
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Middle East low-cost carriers such as flydubai and Air Arabia are among the fastest-growing in the world, according to new data released ahead of the Dubai Airshow, which starts on Sunday.

Low-cost carriers (LCCs) in the region increased their capacity by 17.7 per cent in the 12 months ending in June. That places them in second place behind the capacity increase of 28.7 per cent reported by their counterparts in Asia, according to the research by Amadeus, an aviation software solutions specialist.

LCCs in the Middle East added 2 million seats during the period, with a total seat capacity of 13.5 million at the end of June. This increase was the third-largest behind Asia (28.9 million) and North America (2.2 million).

Airports in the UAE and in Qatar collectively serve about 15 per cent of all air traffic volume from Asia to Europe and from Europe to the southwest Pacific, according to Alexandre Jorre, an LCC specialist at Amadeus.

Aviation traffic between Europe and Asia that is routed via the Middle East was growing at about 20 per cent a year, he noted.

“Some of these routes – local and regional may be targeted by LCCs, while routes with longer ranges or routes relying on partnerships with codeshare and interline partners are beyond the core LCC target,” said Mr Jorre.

Air Arabia, the UAE’s only listed budget airline, this week said passenger traffic for the first nine months of the year stood at 4.5 million, up 15 per cent from last year.

The Sharjah-based carrier’s third-quarter revenues grew 6 per cent year on year to Dh854 million.

However, profits slipped 6 per cent to Dh206m, which the company attributed to fewer passengers during Ramadan.

Air Arabia took delivery of two A320 aircraft from Airbus during the quarter and will take delivery of two more before the end of the year.

Flydubai last week said it had secured a US$228m loan to purchase six new Boeing 737-800 aircraft, of which it has already taken delivery of two.

The airline, owned by the Dubai Government, will take delivery of a 737-800 aircraft before the end of the year, and will receive the remaining three in the second half of next year.

Total passenger capacity for LCCs worldwide grew to 558.9 million at the end of June, a year on year increase of 6.8 per cent.

Capacity growth is most pronounced among Asian LCCs. Indonesian budget carriers, including Indonesia AirAsia and Lionair, increased their capacity by 12.3 million seats during the period, equivalent to 35 per cent of the global increase in capacity.

Low-cost carriers in India, Thailand and Malaysia together added 6.8 million seats during the period.