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.
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.
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.
