Barathan Pasupathi, chief executive of Kuwaiti budget carrier Jazeera Airways, took the role in late March. Photo: Jazeera Airways
Barathan Pasupathi, chief executive of Kuwaiti budget carrier Jazeera Airways, took the role in late March. Photo: Jazeera Airways
Barathan Pasupathi, chief executive of Kuwaiti budget carrier Jazeera Airways, took the role in late March. Photo: Jazeera Airways
Barathan Pasupathi, chief executive of Kuwaiti budget carrier Jazeera Airways, took the role in late March. Photo: Jazeera Airways

Jazeera Air 'won't hesitate' to open new base outside Kuwait if it gets right opportunity


Deena Kamel
  • English
  • Arabic

Jazeera Airways will consider opening a new base outside its home in Kuwait if it finds the right opportunity, as the airline remains bullish on growth despite geopolitical tensions in the Middle East.

The low-cost airline is focused on developing new direct routes from Kuwait to capitalise on strong demand and diversifying travel segments to capture more leisure and religious traffic, Jazeera Airways' new chief executive Barathan Pasupathi told The National.

"For the foreseeable next 12 to 18 months, we are going to be very focused on Kuwait. But if and when a hub opportunity comes along that is attractive for Jazeera and the wider growth of our network, we will not be hesitant to look into it," Mr Pasupathi said.

Jazeera Airways, which in March last year announced plans to start a low-cost airline in Saudi Arabia to be based at the King Fahd International Airport in Dammam, has placed a bid for the licence and is optimistic about its chances.

"We went through all the steps of a tendering process and completed the due diligence to establish a hub in Dammam, twice. We are still awaiting an official announcement," Mr Pasupathi said.

"We do believe we have the best credentials and have submitted the best plan but this is a tendering process so it can go either way."

Saudi Arabia's General Authority of Civil Aviation did not respond to a request by The National for comment on the status of the bidding process.

Jazeera Airways projected a "strong" outlook for 2024, depending on geopolitical developments in the region, after reporting a 37.3 per cent increase in second-quarter net profit to reach 5.4 million Kuwaiti dinars ($17.6 million).

Group operating revenue increased 6.2 per cent year on year to 52.6 million dinars during the three-month period, driven by strong demand for summer and Hajj travel. Passenger traffic soared by 6.5 per cent to 1.1 million.

Load factor, a measure of how efficiently an airline fills available seats, was 74 per cent during the period.

Jazeera Airways expects to take delivery of its new Airbus A320 Neo family of jets in 2026 after placing an order during the Dubai Airshow in November 2021. Photo: Jazeera Airways
Jazeera Airways expects to take delivery of its new Airbus A320 Neo family of jets in 2026 after placing an order during the Dubai Airshow in November 2021. Photo: Jazeera Airways

New routes

Mr Pasupathi, who was appointed chief executive in late March, said his focus will be on maintaining the airline's growth and reducing unit costs by bringing in-house some capabilities such as maintenance and ground-handling work.

The airline is striving to lower its unit costs by improving aircraft use and reassessing the seat density on the Airbus A321 Neos entering its fleet by 2026, he said.

Jazeera Airways will make an announcement by the fourth quarter of this year on this "strategic shift to transform its cost base", he said.

"There is an inflationary environment and as an airline we really need to manage our costs to keep fares affordable and accessible to customers, so Jazeera will be embarking on certain strategic shifts," Mr Pasupathi said, without providing details.

As it develops new direct routes to and from Kuwait, Jazeera Airways is considering the lucrative markets of south-eastern Europe that are "affordable and attractive", he said.

In the second quarter, Jazeera Airways introduced two new direct routes to Krakow, Poland, and Batumi, Georgia, from Kuwait.

The airline also sees new opportunities in travel markets where Kuwait is renegotiating bilateral air service agreements, Mr Pasupathi said. If successful, these enhanced agreements could allow Jazeera access to second-tier cities in India, for example.

Jazeera Airways plans to hire up to 3,000 staff from 2026 onwards when it takes delivery of its new Airbus narrow-bodies. Photo: Jazeera Airways
Jazeera Airways plans to hire up to 3,000 staff from 2026 onwards when it takes delivery of its new Airbus narrow-bodies. Photo: Jazeera Airways

Airbus A321 Neo 'game-changer'

Jazeera Airways, which signed a deal to buy 28 Airbus narrow-body aircraft at the Dubai Airshow in November 2021, has taken delivery of two jets and expects the remaining ones to come on time in 2026. The deal was for 20 A320 Neos and eight A321 Neos.

To operate the new aircraft and keep pace with the increase in growth, the airline expects to expand its workforce to about 2,000 to 3,000 employees, up from1,600 people currently, the chief executive said.

Jazeera Airways also expects to reach a decision on an engine order for these aircraft by the end of this year, he added.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Timeline

2012-2015

The company offers payments/bribes to win key contracts in the Middle East

May 2017

The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts

September 2021

Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act

October 2021

Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence 

December 2024

Petrofac enters into comprehensive restructuring to strengthen the financial position of the group

May 2025

The High Court of England and Wales approves the company’s restructuring plan

July 2025

The Court of Appeal issues a judgment challenging parts of the restructuring plan

August 2025

Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision

October 2025

Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange

November 2025

180 Petrofac employees laid off in the UAE

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Updated: September 06, 2024, 9:32 AM