Routes News Magazine, Issue 4, 2014

routesnews ISSUE 4 VOL 10, 2014

The world air service development magazine

routesonline.com

Flights for Africa: Fastjet’s Richard Bodin

VIEW FROM THE TOP: UNWTO’s Taleb Rifai

INTERVIEW:

Flynas’s Raja Azmi

Q&A:

Aeroflot’s Vitaly Saveliev

routes-news.com Destination:

Spotlight on:

Airport:

Report:

Event report:

Victoria Falls’ growth plans

Ethiopian and Wizz

Tanzania’s Kilimanjaro

Israel’s Open Skies

Routes Europe smashes records

routesnews ISSUE 4 VOL 10, 2014

The world air service development magazine

routesonline.com

Eyes on the prize: Aeroflot’s CEO, Vitaly Saveliev

VIEW FROM THE TOP: UNWTO’s Taleb Rifai

INTERVIEW:

Flynas’s Raja Azmi

FLIGHTS FOR AFRICA: Fastjet’s Richard Bodin

routes-news.com Destination:

Spotlight on:

Airport:

Report:

Event report:

Victoria Falls’ growth plans

Ethiopian and Wizz

Tanzania’s Kilimanjaro

Israel’s Open Skies

Routes Europe smashes records

Foreword EDITORIAL Lucy Siebert, Acting Editor +61 432 770 828 lucy.siebert@routes-news.com Jonny Williamson, Senior Reporter +44 (0)208 831 7560 jonny.williamson@routes-news.com Justin Burns, Reporter +44 (0)208 831 7508 justin.burns@routes-news.com Joe Bates, Group Editor +44 (0)208 831 7507 joe@aviationmedia.aero

SALES Rebecca Randall, Group Advertising Director +44 (0)208 831 7513 rebecca.randall@routes-news.com David McCauley, Advertising Manager +44 (0)208 831 7515 david.mccauley@routes-news.com

PRODUCTION Elaine Harris, Design & Production Manager elaine.harris@routes-news.com Andrew Montgomery, Creative Director andrew.montgomery@routes-news.com Mark Draper mark@aviationmedia.aero Website Jose Cuenca jose@aviationmedia.aero Erica Cooper erica@aviationmedia.aero

PUBLISHER Jonathan Lee +44 (0)208 831 7563 jonathan@aviationmedia.aero Published by Aviation Business Media Ltd Sovereign House, 26-30 London Road, Twickenham, TW1 3RW, UK T: +44 (0)208 831 7500 F: +44 (0)208 831 7501 The opinions and views expressed in Routes News are those of the authors and do not necessarily reflect any policy or position of UBM Information Ltd or Aviation Business Media.

Printed in the UK by The Magazine Printing Company using only paper from FSC/PEFC suppliers www.magprint.co.uk

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Victoria Falls in Zimbabwe and Tbilisi in Georgia may be miles apart in more than just geographical terms, but both are determined to showcase their unique offerings to the world’s route developers.

W

e are halfway through the year and it won’t be long until we are heading off to World Routes in Chicago in September.

And while now is a good time to secure those all-important hotel rooms within easiest walking distance of McCormick Place (who doesn’t appreciate those extra 10 minutes in the morning before a full day of meetings?), the regional Routes events are not quite over yet.

Following a record-breaking Routes Europe event in Marseilles, Routes Africa is set to thunder in one of Africa’s most dramatic backdrops, Victoria Falls in Zimbabwe, and Routes Silk Road will debut in the historic city of Tbilisi in Georgia.

Both Georgia and Zimbabwe have been through turbulent periods in recent times, but the hosting of the Routes events clearly demonstrates their commitment to stability, growth and attracting foreign investment.

You can read more about United Airports of Georgia’s success and air traffic growth trajectory from CEO, Ketevan Aleksidze, on page 24.

Meanwhile, Civil Aviation Authority of Zimbabwe’s David Chawota outlines plans to lure more of the international and regional MICE market to Victoria Falls on page 21.

While these two host destinations might be geographically miles apart and each faces very different challenges, the UNWTO has been active in working with local stakeholders in both countries in order to help stimulate future tourism demand.

Routes and the UNWTO have also committed to working far more closely together, resulting in the UNWTO hosting, for the first time, taskforce meetings at both Routes Africa and Routes Silk Road. These are aimed at fostering closer relations and increasing air services to both destinations. You can find out details on that initiative from UNWTO secretary-general Taleb Rifai on page 42.

I look forward to hearing about your experiences at both Routes Africa and Routes Silk Road – remember it’s easy to get in touch via email or social media. lucy.siebert@routes-news.com @LucySiebert and @routesnews facebook.com/routesnews

Acting Editor Lucy Siebert

R™ is a Registered Trade Mark of UBM Information Ltd and is used under licence. © Copyright 2014. The content of this publication is the copyright of UBM Information Ltd and shall not be copied or stored in digital format without the written permission of the Copyright holder. Content is correct at time of printing. UBM Information Ltd shall not be liable for any errors or omissions contained herein.

ROUTES NEWS 4, 2014

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Contents 16

6 World news 9 Cargo news 11 On the move 13 Airline one2one

Aeroflot’s CEO, Vitaly Saveliev, shares the latest on the Russian carrier’s plans and the launch of its low-cost subsidiary, Dobrolet.

15 Airport one2one

Dubai Airports’ vice president forecasting and research, Helen Woodrow, reflects on a busy year at Dubai World Central (DWC).

16 Flights for Africa

Fastjet is aiming to become Africa’s first pan-continental low-cost airline – but that is easier said than done. Chief commercial officer, Richard Bodin, spoke with Jonny Williamson about the reality of LCC growth in the continent.

19 African dream

Ethiopian is one of the oldest and most successful airlines operating on the African continent. Routes News lists five things you need to know about it.

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21

21 The Smoke that Thunders

The head of the Civil Aviation Authority of Zimbabwe, David Chawota, talks to Jonny Williamson about Victoria Falls’ offering for airlines and tour operators.

32

32 UP, UP and away

El Al has responded to the opening of the skies between Israel and the European Union with newly launched low-cost brand UP, Martin Rivers reports.

24 Meeting point

35 Egypt’s Nile Air defies downturn

27 Gee Wizz, time flies

36 Routes Europe Report Back

Georgia is an ancient gateway between Asia and Europe.

United Airports of Georgia’s CEO, Ketevan Aleksidze, spoke with Jonny Williamson about the growth taking place in the country’s aviation sector.

Wizz Air recently celebrated its 10th birthday. Its network now encompasses cities in Russia, the UAE and Azerbaijan. Routes News looks at five essential facts about this growing carrier.

29 Flying east

Saudi low-cost carrier Flynas has an ambitious long-haul expansion strategy, underpinned by new flights to the UK, writes Justin Burns.

Despite a steep drop in tourism traffic to Egypt, Nile Air, the Cairo-based scheduled carrier founded in 2008, plans to double its fleet size and add several new destinations this year.

39 New heights

Kilimanjaro International has celebrated air services success by attracting Qatar and Turkish – now it believes Africa as a whole is poised for a new era of route development, writes Lucy Siebert.

40 Events essentials 42 View from the top

Taleb Rifai, secretary-general, World Tourism Organization (UNWTO).

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World news

Air Madagascar teams up with Marseille Air Madagascar will up its presence at France’s Marseille Provence Airport with new flights to the African islands of Madagascar and Comoros starting in June.

The African carrier has operated between the Madagascan capital, Antananarivo, and Marseille Provence since 2006.

New services to Nosy Be and Moroni will be operated with a B767-300ER from Portuguese

charter airline EuroAtlantic Airways, which will be based in Marseille.

Nosy Be is Madagascar’s most popular tourist spot, and will be served by Air Madagascar with a weekly flight from June 29.

Moroni in the Comoros will also be served once a week, via Antananarivo. Moroni is the capital of Grande Comore, the largest of the three islands making up the Comoros.

Nosy Be, Madagascar.

Cathay adds Zurich and Manchester Cathay Pacific confirmed it will operate direct daily services from Hong Kong to Zurich from March 29, 2015, subject to regulatory approval.

The Swiss route will be operated with a B777-300ER in a four-class configuration.

“We are very pleased to be able to add Zurich to our growing international network. Zurich and Hong Kong are two of the world’s leading financial centres, where people appreciate high standards of service, and we are seeing considerable demand for a quality travel experience,

Nigeria’s Arik Air says it is actively exploring new flights to India. There are no direct flights between the two countries. Data from Routesonline shows bi-directional O&D demand has grown annually by 25.3% over the past 10 years to just under 150,000 in 2013.

South Africa could see the launch of yet another new airline, Fly Blue Crane, led by

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ROUTES NEWS 4, 2014

especially on long-haul routes,” said Ivan Chu, Cathay’s CEO. Zurich joins Amsterdam, Frankfurt, London, Milan, Moscow, Paris and Rome on Cathay’s route network. The airline previously flew to Zurich but halted the service in 2001 due to commercial reasons.

In addition to the new Zurich link, Cathay Pacific will also launch new service to Manchester in the UK, serving the large Chinese population in the northwest of England.

former SAA and SA Express executives Siza Mzimela, Theunis Potgieter and Jerome Simelane. While the project is in its early days, the start-up has applied for an air services licence from South Africa’s Ministry of Transport.

UK leisure carrier Thomas Cook Airlines will launch new long-haul flights to the US from the UK’s Stansted, Manchester and Glasgow in

Between 2004 and 2013, Cathay Pacific’s European air capacity from Hong Kong rose 44.1%. The London market is its largest, accounting for 43.2% of the non-stop European capacity from Hong Kong last year. This declined from a high of 46.5% in 2010 due to the introduction of new direct links to Milan and Moscow.

According to MIDT data, an estimated 76,000 bi-directional O&D passengers flew between Zurich and Hong Kong in 2013, a route that is already served

by Swiss.

2015. The long-haul growth will be supported by a major investment in upgrading its A330 fleet. From Stansted it will fly to Orlando, Las Vegas and Cancun; from Manchester it will fly to Miami and New York JFK; and from Glasgow to Las Vegas.

Norwegian is expanding at London Gatwick with two new routes to Berlin and Warsaw from October. It will fly to both

European capitals six times a week. Norwegian will also up frequencies from Gatwick to Copenhagen to five a week from September.

Flydubai is launching new flights from Dubai to Delhi, Kochi and Thiruvananthapuram in June.

These cities join existing flights to Ahmedabad, Hyderabad and Lucknow, doubling its Indian network.

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QATAR moves into Hamad International Airport RUSSELS lands B Emirates service YANAIR returns R to Wales with Tenerife flights NITED ups new U B787-9 Melbourne flight to daily

Etihad ups luxury on A380 and B787 routes London, Sydney and New York will be the first cities to welcome Etihad’s new A380 aircraft, while Washington, Düsseldorf and Mumbai will be the first to greet its Dreamliners. A380 services will launch from Abu Dhabi to Heathrow in December, with a second A380 being deployed on the route in 2015. By the end of next year,

Etihad plans to be flying A380s to Sydney and New York JFK. The route announcements were accompanied

by Etihad revealing luxurious, hotelstyle premium class products on the A380 and B787s. The superjumbo will feature a first-class product called ‘The Residence’, while the ‘First Suite’ will feature on board its B787s.

Air Canada scores with Rio flight Air Canada will launch its second direct route to Brazil with flights from Toronto to Rio de Janeiro starting in December.

The carrier will operate the route three times a week, which will join its existing daily services to São Paulo.

Data shows that Rio de Janeiro is the largest connection market beyond São Paulo for Air Canada’s existing flight into Brazil, with around 11,000 O&D passengers.

To balance the new Rio flight, Air Canada will downgrade São Paulo to a B777-200LR from October 26, reducing its offering by around 75 seats a day. It is expected that capacity on the route will

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be further reduced from summer 2015 with the deployment of a 767-300ER. “Air Canada is very pleased to become the only carrier offering non-stop flights between Canada and the storied Brazilian city of Rio de Janeiro. The service will complement our Toronto–São Paulo route, meaning Air Canada will now offer two destinations in Brazil, one of the largest and most vibrant economies in the world, and strengthens our position as the only carrier flying non-stop between Canada and South America,” said Benjamin Smith, executive vice president and chief commercial officer, Air Canada.

Take off

or not SINGAPORE AIRLINES to axe Cairo and Riyadh TROOPS AND SEPARATISTS BATTLE at Donetsk airport in Ukraine FEARS FOR TOURISM following Thailand’s military coup

ROUTES NEWS 4, 2014

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Cargo news arch M freight growth

ANA is operating a Okinawa–Singapore–Tokyo routing six times a week.

New ANA freighter for Changi Japan’s ANA has launched a new six-times weekly service to Changi, operating an Okinawa–Singapore– Tokyo Narita routing.

ANA is operating a B767 on the route, saying it had seen strong demand for fresh food and Japanese food products on the Singapore routes.

The airline’s presence in Singapore is being supported by the relocation of its Asia cargo office from Hong Kong to Singapore.

Amerijet International has signed a long-term lease agreement with Rickenbacker International Airport in Columbus, Ohio.

Amerijet will operate flights to 11 US cities, operating B767 freighters from July 7.

Emirates SkyCargo has started operating from its new cargo terminal at Dubai World Central’s Al Maktoum International Airport.

Cargolux Airlines will start scheduled services to Zhengzhou, China, from June 24, two months later than the flight’s original launch date in April.

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Changi Airport Group’s assistant VP for cargo & logistics development, James Fong, said the new ANA service showed the hub’s commitment to cargo growth.

“While the outlook for the global airfreight sector remains flat, this is an example of CAG’s commitment in partnering with our airline partners to explore new opportunities and stimulate growth in niche cargo segments, as well as overall traffic to emerging economies in the region,” he said.

Recent data from IATA shows the international airfreight market grew 5.9% during March.

While capacity grew 3.4% during the month, IATA noted air cargo volumes had plateaued since the start of the year. The flat volumes match the “recent pause in improvements to business conference and world trade”, IATA said in a statement.

Looking ahead, IATA said rising export orders were expected to boost the US and European markets.

This, it noted, was “providing a reason to be cautiously optimistic for the resumption of growth”.

IATA however, added Chinese output was continuing to slow, with March marking the fourth month of slowing growth in the giant Asian economy.

Qatar kicks off new Stansted route Qatar Airways Cargo has launched its B777operated freighter service to London Stansted.

The first flight touched down on May 2, marking the first of the five-times weekly services.

Qatar Airways’ chief cargo officer, Ulrich Ogiermann, said the new route was important to the airline’s growth.

“Stansted is one of the largest freight hubs in the UK, transporting over £8 billion worth of cargo every year and accounts for approximately 13% of all UK airfreight,” he said.

MAG’s commercial director for Cargo, Graeme Ferguson, added: “The introduction of this service will create new opportunities for customers from the Middle East and beyond, as well as for

businesses and exporters from across London and the eastern region.”

The Stansted route launch comes after Qatar Airways Cargo launched its QR Pharma and QR Fresh programmes in January. These are aimed at optimising the transportation of time and temperaturesensitive goods, such as high-value pharmaceutical products and perishable FMCGs.

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ROUTES NEWS 4, 2014

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On the

move UBM Live has appointed Michael Miller as head of content & industry relations for Routes. Miller has previously been director, editorial operations for the Aviation Week Group; vice president strategy for the American Aviation Institute; partner at the Velocity Group; and president of Miller Air Group.

Miller is based in Orlando.

A leadership shuffle at JetBlue has seen both David Clark and Scott Laurence being promoted. Laurence, previously vice president, network planning & industry partnerships, has been promoted to senior vice president, airline planning.

Meanwhile, Clark has been appointed vice president, network planning, reporting to Laurence.

Justin Meyer has returned to the Kansas City Aviation Department as deputy director of marketing and air services director. Meyer returns to Kansas after more than two years as air services director at Tampa International Airport.

Irish regional airline Stobard Air has appointed former bmibaby chief, Julian Carr, as its managing director, and promoted interim managing director, Sean Brogan, to chairman.

routesonline.com

TUI Travel has reorganised its five tour operator airlines, which will now operate as one division.

This will be led by Chris Browne, previously managing director of Thomson Airways, who has been named chief operating officer of the group’s aviation division, while John Murphy now heads up Thomson Airways.

Adam Rowe has been appointed commercial director at Tigerair Australia, replacing Carly Brear who has left the LCC. Rowe is responsible for all commercial aspects of Tigerair Australia, including revenue management, network, marketing, communications, sales and distribution and ancillary revenue.

AirAsia X has appointed Dato’ Bernard Francis, previously commercial director for Indonesia AirAsia, as its new commercial director.

He will be responsible for AirAsia X’s commercial department, including revenue management, sales & distribution, marketing, communication & events, branding, route & network planning and ancillary revenue.

Cork Airport has appointed Anita Gackowska, previously head of marketing at Madrid Airport, as head of aviation marketing.

US-based Sixel Consulting Group has appointed Dustin Robbins as air service development consultant.

Robbins most recently worked on American Airlines’ route forecasting and network development team.

Mark Kiehl has joined Mineta San Jose International Airport as air service development manager. He makes the move from Palm Springs International, where he was deputy director, aviation, marketing and development.

There have been a number of appointments at Hawaiian Airlines, including Christopher Keen as director – network strategy. Keen has more than a decade of route development consulting experience with airlines, most recently as senior associate at Oliver Wyman.

He moves into the role previously held by Timothy Liu, who has been promoted to senior director, international sales, Asia. Meanwhile, Jim Landers has been appointed director, strategic initiatives and Hing-Cheong (HC) Kwok has been appointed country director, China.

Michael Miller

Chris Browne

Adam Rowe

Dato’ Bernard Francis

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Airline one2one

Aeroflot’s CEO, Vitaly Saveliev, shares the latest on the Russian carrier’s plans and the launch of its low-cost subsidiary, Dobrolet.

How is Aeroflot’s route network structured?

Which routes are Aeroflot’s fastest growing?

Aeroflot is based at a single hub, Moscow Sheremetyevo, where it has six banks of connectivity. The network is balanced by a number of domestic and international flights, providing passengers from across Russia with convenient transfers to international destinations in Europe, North and Central America, Asia, the Middle East and Far East. Aeroflot’s core network is supported by a network of regional domestic and international point-to-point flights operated by the group’s subsidiary carriers from a number of centres in the south and the far east of Russia – including Sochi, Rostov-on-Don, Krasnodar, Khabarovsk, Vladivostok and Yuzhno-Sakhalinsk – as well as in the northwest in St Petersburg.

In 2013, our fastest growing routes year-on-year were our North American operations (+52% by number of passengers carried) and domestic routes (24%), while operations to Asia grew by 14%. For example, on the Moscow–New York route, volumes increased by almost 40%, to Bangkok by 36% and to Hong Kong by 25%. Many Russian domestic destinations saw substantial growth, such as Krasnoyarsk (32%), Vladivostok (26%), Khazan (29%), Sochi (20%) and St Petersburg (21%).

What are your most important international, regional and domestic routes?

Transit passenger flow is important to our network model, but is far from having the importance it has in other airlines’ business models. By utilising the geographical advantages offered by Sheremetyevo, which is positioned at the crossroads of two global markets, we significantly reduce flight times and distances compared with alternative hubs used by other European carriers.

Aeroflot’s network is well-balanced for distributing passenger flows, and functions as an integrated system with each route forming an interconnecting link with other network segments.

routesonline.com

How is the Aeroflot Group structured?

The group comprises several carriers, including Aeroflot, which runs premium operations via its Sheremetyevo hub, and several regional companies, which operate internal and international passenger flights in several regional centres. This includes Rossiya in the northwest, Donavia in the south and Aurora in the east.

Why is the group launching Dobrolet?

The launch of a low-cost carrier is part of a strategy to grow our budget operations.

International experience shows that, in most cases, low-cost carriers are more profitable than traditional carriers and have a lower debt burden. We expect Dobrolet to break even within two years, and its capitalisation to reach US$1.4 billion one or two years later.

With Dobrolet, the group’s consolidated operational and financial indicators will grow as we strengthen our positions in markets currently occupied by our competitors.

When will Dobrolet launch and what will be its first routes?

Dobrolet is planning to start flights in summer 2014. In the first year of operations it will serve nine destinations out of Moscow. The first routes will be St Petersburg, Yekaterinburg, Samara and Krasnodar.

What is the strategy for future expansion of Dobrolet?

In three years the network will expand to include 26 destinations. International destinations, such as Kiev, Yerevan and Istanbul, are planned for the second or third year of operation.

What is the biggest challenge facing aviation in Russia?

The state of airport infrastructure is one of the biggest factors holding back the development of airline operations in Russia, particularly at the regional level in remote areas of Siberia, the far north and far east.

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Airport one2one

Dubai Airports’ vice president forecasting and research, Helen Woodrow, reflects on a busy year at Dubai World Central (DWC).

How has Al Maktoum International at Dubai World Central (DWC) performed in its first six months of passenger traffic operations?

Passenger volumes continued to grow strongly in the first quarter of 2014 as more airlines commenced operations since the opening of the passenger terminal building on October 27, 2013.

In March, Qatar Airways joined Wizz Air, Jazeera Airways, Gulf Air and a number of charter carriers operating flights from DWC. A total of 102,137 passengers passed through the airport in the first three months of this year. This was the first full quarter of operations since the terminal opened. It follows the 65,197 passengers which used the airport between October 27 and December 31, last year. Growth is expected to continue in the second quarter of 2014, from about 80 flights a week to over 600. This is due to some airlines temporarily moving from Dubai International where both runways will be refurbished and upgraded from May 1 to July 20. This includes flydubai, which will operate a number of flights from DWC, in addition to flights from Dubai International’s Terminal 2.

What are the main benefits of the new airport?

For our passengers, it is the intimacy and simplicity of using the new passenger

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terminal. This allows them to quickly move from the kerbside to the gate, which they appreciate. The building is compact, with parking directly in front of the terminal. There is minimal walking involved and the proximity to the new areas south of the city, such as Dubai Marina, is another advantage.

How is traffic balanced across different segments?

Al Maktoum at DWC largely attracts O&D operators, as there isn’t yet an inter-airport transfer connection product in place. However, we are currently providing a free shuttle service to provide landside connectivity between airports and we will enhance product offerings as the market dictates. That said, airlines such as Qatar Airways and Gulf Air are targeting travellers who prefer arriving and departing from the new Dubai catchment area. We really cater for all airlines at DWC, from low-cost airlines such as Wizz Air, to full-service carriers such as Qatar Airways.

What is your passenger traffic target for 2014?

While we haven’t specified a target per se, with several airlines having temporarily moved flights to DWC due to the runway upgrade and refurbishment project currently under way at Dubai International, we expect

traffic at DWC to significantly increase over this period. We are also talking to a number of scheduled carriers and we hope some of them will be announcing their operations to DWC before the end of the year.

What types of incentives are you offering airlines at the new airport?

We are offering various types of air service incentives, including discounts on aeronautical charges. Each incentive scheme is negotiated independently with the new operator depending on operational profile and the level of traffic the airline is expected to generate.

What is your long-term vision for DWC? With double-digit passenger traffic growth expected to be sustained well beyond 2020 and given capacity constraints at Dubai International in the long term, DWC will play a vital position in accommodating our future growth.

We are currently reviewing the master plan for the airport to ensure it meets future requirements both in terms of scale and quality. Currently the master plan for DWC will see the airport expanded to ultimately accommodate more than 160 million passengers and 12 million tonnes of freight, with a total of five runways.

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Flights for

Africa Fastjet is aiming to become Africa’s first pan-continental low-cost airline – but that is easier said than done. Chief commercial officer, Richard Bodin, spoke with Jonny Williamson about the reality of LCC growth in the continent.

I

t doesn’t get more ‘London’ than drinking tea with an airline chief commercial officer at one of the Square Mile’s boutique hotels, during a week when the city’s tube drivers were on strike.

It’s a long way from the open plains and bustling, growing cities of East and Southern Africa where Richard Bodin and the rest of the fastjet team are focused on bringing low-cost flights to a whole new market of airline passengers.

Routes News meets with Bodin after what has been a momentous few months for the LCC, including the launch of its first international service from Dar es Salaam.

Fastjet has established a strong market position in its home country of Tanzania since launching operations there in November 2012. It has since built a domestic network that includes Kilimanjaro, Mwanza, Mbeya and Zanzibar.

Things have, however, been trickier in other markets.

Fastjet launched its first international route, Dar es Salaam–Johannesburg, in October 2013, after a protracted wrangle with South African regulators.

In February, the airline added Lusaka in Zambia to its network, and has welldeveloped plans to establish a base there in the near future.

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Having carried its 500,000th passenger, fastjet’s Bodin attributes the airline’s success in its home market to a combination of governmental support, the Tanzanian people’s enthusiasm for low-cost air travel, good brand recognition and effective communication campaigns.

“By dramatically lowering fares, fastjet stimulated demand, persuaded Tanzanians away from roads and fundamentally made aviation accessible,” he says.

Fastjet now plans to expand further with routes planned to Malawi’s capital Lilongwe and Zimbabwe’s capital Harare, as well as launching flights from Dar es Salaam to the Kenyan capital, Nairobi.

Turbulence in South Africa

As Africa’s economic, mining and industrial centre, Johannesburg is a market with tremendous potential for fastjet. Adding South Africa’s commercial powerhouse to its destination network was a priority right from the beginning.

Popular with commercial and leisure passengers, Bodin notes the Johannesburg service is also a hit with blue-collar workers and service staff travelling between South Africa and Tanzania’s numerous mines.

Richard Bodin

The launch of Dar es Salaam– Johannesburg was accompanied by the well-documented wrangling with South Africa’s regulators, which fastjet believes was linked to protectionism of the country’s struggling national carrier, South African Airways (SAA).

“Initially we were seen as a potential threat and on that basis our application for a foreign operator licence took far longer than originally anticipated,” says Bodin.

Despite those delays, the route is now growing steadily, Bodin says. Now, fastjet is working on plans to broaden its network in South Africa with the addition of services to Cape Town and Durban.

Angola and Ghana

Fastjet recently announced it was grounding flights in Angola and scaling back its Ghanaian operation to instead focus on opportunities in East and Southern Africa. It operated in both of

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Fastjet the countries under the Fly540 brand, with turboprop aircraft.

Bodin believes East and Southern Africa are more capable of supporting an LCC model and that fastjet will be able to stimulate new markets in both regions.

Despite this, Bodin says Angola and Ghana will play a part in fastjet’s future strategy.

“With an economy supported by new wealth derived from the oil and gas industry, Angola in particular is a significant country with vast amounts of potential,” he says.

Bodin adds that Ghana’s aviation market still has a long way to go before it reaches full maturity. He says substantial airport investment is required in order for the country’s airports to accommodate more widebody aircraft.

Low-cost transformation

Fastjet’s success in Tanzania has had a positive effect on the local market, encouraging its competitors, primarily Precision Air, to reduce airfares and up their service standards.

In an environment where on-time performance, flight cancellations and reliability weren’t consistently quantified, 96% of fastjet’s flights were on time during its first 15 months and only a handful of flights were cancelled.

Bodin credits such benchmarks as being a catalyst for improvements across many of the region’s airlines, with several aviation authorities working to overhaul the infrastructure under their respective controls.

“Governments see what we are achieving in Tanzania – the benefits to the people and the economy, and now recognise that a strong LCC operating in their country will actually improve the market, rather than threaten the established flag carrier,” the CCO says.

Future of African aviation

Many sub-Saharan economies are going through dramatic change, with new wealth and a burgeoning middle class emerging. Despite this, South Africa is the only country where there is true LCC competition, because of the

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By dramatically lowering fares, fastjet stimulated demand, persuaded Tanzanians away from roads, and fundamentally made aviation accessible restrictive regulatory regimes in most African countries.

Protectionism is something fastjet executives have consistently voiced concerns about.

Despite the challenges, Bodin believes regional agreements are achievable for Africa.

Looking ahead, Bodin believes organic growth will be key to building on existing fastjet routes and frequencies.

He is also keen to see new routes being launched, in particular a new service from Dar es Salaam to Nairobi, and forecasts fastjet will expand its fleet of three A319s as new bases in Tanzania, South Africa, Zambia and other markets are established.

And while Africa remains a highly regulated market, that is not to say fastjet does not face stiff competition from the likes of Kenya’s Jambojet and Kenya Airways; South African Airways (SAA) and its LCC subsidiary, Mango; Ethiopian Airlines; and West Africa’s ASKY Airlines.

Bodin welcomes this competition, saying it is a way of keeping fastjet “honest, focused and responsive, as well as helping to develop Africa’s aviation market overall”.

“Our decision to enter virgin territory with a vastly different business model centred on low fares and universal accessibility was met with some scepticism. However, the benefits of aviation are far-reaching and our decision has quickly been proven to be the right one,” he concludes.

HEAR FROM THE CCO

Richard Bodin, chief commercial officer of fastjet, will be speaking at the Routes Africa Strategy Summit on Sunday, June 22, at Elephant Hills Resort, Victoria Falls.

ROUTES NEWS 4, 2014

17

Ethiopian Airlines

African dream Ethiopian is one of the oldest and most successful airlines operating on the African continent.

Routes News lists five things you need to know about it.

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2

3

HISTORY MAKER

CONTINENTAL GIANT

REGIONAL LEADER

Ethiopian Airlines was established in 1945 as a joint venture with TWA and the Ethiopian government. The airline originally started with five Douglas C-47 Skytrain aircraft, courtesy of the US government. Its first flight operated from Addis Ababa to Cairo, via Asmara, on April 8, 1946. Today, Ethiopian is one of Africa’s most profitable and fastest growing carriers, with a hub operation in Addis Ababa, as well as equity stakes in regional subsidiaries in West and Southern Africa.

With it being involved in regional subsidiaries in West Africa in ASKY Airlines and in Southern Africa in Malawian Airlines, Ethiopian is championing a new regional partnership model in Africa. From its hub in Addis Ababa, it operates Africa’s most modern fleet made up of 62 aircraft.

Importantly for regional development, the airline has significant international reach, particularly to the Far East.

It counts Beijing, Bangkok, Hangzhou and Shanghai – the first direct flight to that Chinese city from the African continent – among its direct services. Within Africa, Ethiopian serves vital business destinations, such as Johannesburg and Lagos, and also serves popular leisure routes including Zanzibar, Mombasa and Kilimanjaro, which are easily accessible to European tourists via Addis Ababa.

Ethiopian signed a five-year management contract with West Africa’s ASKY in 2009.

This has been hailed as a historic intra-African co-operation agreement and under the plan Ethiopian and ASKY are developing a West African hub in Lome, Togo. In 2013, Ethiopian finalised a deal to become the strategic partner in the new Malawian Airlines with a 49% equity shareholding.

At the time, Ethiopian said the partnership was part of its ‘Ethiopian Vision 2025’ strategic roadmap of setting up multiple hubs in Africa. Under the deal, Lilongwe has become Ethiopian’s third hub in Africa. Malawian Airlines’ first international service to Johannesburg took off in February 2014, operating from the Malawian capital via Blantyre.

HEAR FROM THE CEO

Ethiopian Airlines CEO, Tewolde Gebremariam, will deliver a keynote address at the Routes Africa Strategy Summit in Victoria Falls on June 22.

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4 INVESTING IN EXCELLENCE The airline operates the youngest fleet in Africa, made up of 62 aircraft. It was also the first African carrier to welcome a B787 Dreamliner, which landed in Addis Ababa on December 11, 2011. It primarily operates a Boeing fleet, with B777-300ER, B777200LR and B737-800W types, among others. As Ethiopia is an important cargo and trade hub for East Africa and the rest of the continent, the airline has six cargo aircraft in its fleet.

Ethiopian is also planning for the future, with 33 aircraft on order. This includes 14 A350-900 aircraft from Airbus, as well as a further eight B787 Dreamliners from Boeing.

5

LOVING LONDON

With a long history of trade and a sizeable Ethiopian community in London and other major cities around the UK, Ethiopian has served the British capital, without any breaks, since April 1, 1973.

This summer it will up its frequencies to Heathrow from six-times weekly to daily. Later this year, Ethiopian will move into its new home at Heathrow with its fellow Star Alliance partners in the new Queen’s Terminal (formerly Terminal 2).

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Victoria Falls

The Smoke that

Thunders The head of the Civil Aviation Authority of Zimbabwe, David Chawota, talks to Jonny Williamson about Victoria Falls’ offering for airlines and tour operators.

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ictoria Falls believes its got what it takes to become one of Africa’s leading tourist destinations.

Located in northern Zimbabwe on the southern bank of the Zambezi River near the border of neighbouring Zambia, the town of Victoria Falls is named after its famous natural attraction.

Victoria Falls Airport is Zimbabwe’s gateway to the Falls, and handled more than 220,000 passengers in 2013, a significant increase on the previous year’s 180,000.

In total, Zimbabwe welcomed 1.8 million tourists last year, mostly from other Southern African countries.

The Falls’ stunning views, adventure activities and nearby wildlife parks are prime drawcards for tourists, yet a major overhaul of Zimbabwe’s aviation and tourism sectors aims to broaden the region’s appeal further.

The Civil Aviation Authority of Zimbabwe (CAAZ) hopes to grow the destination’s share of the MICE (meetings, incentives, conventions and events) market, head David Chawota explains to Routes News.

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interest of new airlines, tour operators and visitors.

Long-haul appeal

David Chawota

“Our aim is to promote tourism while repositioning Victoria Falls as a global business conference destination,” he says.

To further that goal, CAAZ is overseeing a comprehensive expansion project that will see the airport able to accommodate widebody aircraft (including A340, B747 and B777 types) and increase passenger capacity to 1.5mppa.

Chawota sees both of these aims as being fundamental to raising awareness of Victoria Falls and the

Victoria Falls is currently served by Southern African carriers only, namely South African Airways (SAA), Air Namibia, British Airways franchisee South Africa’s Comair, and Air Zimbabwe. Together, these airlines operate routes to Johannesburg, Windhoek in Namibia, Gaborone and Maun in Botswana, and Zimbabwe’s capital Harare, as well as Bulawayo.

The airport has yet to attract any long-haul or low-cost carriers, but Chawota is confident the new 4,000m runway, which is currently under construction and due to come into service in September 2015, will make a significant difference in Zimbabwe’s appeal to both.

Chawota sees improving links between Zimbabwe and the rest of the world as important in promoting sustainable growth in the country’s aviation sector. Key source markets include sub-Saharan Africa and Europe,

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21

Victoria Falls

The Elephant Hills Resort.

with the Middle and Far East becoming increasingly important.

“Raising the number of direct flights from major source markets is crucial in creating a robust aviation sector and CAAZ is particularly interested in starting negotiations with Chinese carriers and those who fly Arabian routes such as Emirates, Etihad and Qatar,” he says.

Anticipating this growth, the construction of a new 20,000sqm international terminal building is already under way, with the airport’s existing terminal being upgraded into a domestic hub upon its completion next year.

Also included in the $150 million renovation is the construction of an advanced control tower and fire station, additional car parking facilities, the structural strengthening of the existing runway (in order for it to be used as a full-length taxiway once the new runway is completed), and landside and airside road networks.

Tourism growth

While Victoria Falls was once the jewel in Southern Africa’s tourism crown, visitor numbers plummeted in recent decades, particularly during the worst of the political turmoil in the early 2000s.

But more political stability in recent years has helped to boost visitor growth and investment.

More than 70% of visitors to Victoria Falls last year were from Southern African nations, including South Africa; Botswana; Namibia; Zambia and Mozambique.

The majority of these regional visitors currently arrive by road.

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Further afield, CAAZ is currently at an advanced stage of negotiations with Nigeria’s Arik Air and RwandAir, with the organisation saying both airlines are expected to start operating routes into Victoria Falls soon.

Mosi-oa-Tunya David Livingstone was the first European to glimpse the waterfall on November 16, 1855. From a landmass in the middle of the Zambezi River (now referred to as Livingstone Island), the Scottish explorer named the falls in honour of Queen Victoria.

The local Lozi name is Mosi-oa-Tunya, meaning ‘The Smoke that Thunders’.

The Middle and Far East are markets on which CAAZ is particularly focused, due to the huge market potential they offer. It is working with a number of airlines and tour agencies operating in both regions.

World-class events host

While CAAZ is dedicated to attracting new carriers to the region, the authority is

similarly focused on highlighting Victoria Falls’ event hosting capabilities.

Last August, Zimbabwe and neighbouring Zambia partnered to host the 20th United Nations World Tourism Organization (UNWTO) General Assembly at Victoria Falls. Chawota says hosting such an international event was of huge importance for the destination.

“Victoria Falls was able to showcase itself as a destination and the ability to co-ordinate such large-scale events, and local tourism players were able to appreciate the impact of business tourism.”

Modern facilities

Victoria Falls has six venues that offer conferencing facilities, with the largest and most well-known resort being Elephant Hills Hotel, which was the location of 2013’s UNWTO General Assembly.

Many of the region’s hotels are undergoing (or have recently completed) renovations and remodelling to raise their standards.

Chawota is pleased to see the refurbishments taking place and cites the UNWTO General Assembly as a turning point for the destination.

“Event hosting is certainly a sector Zimbabwe is prioritising for future development,” he says.

“The combined redevelopment of the airport and the region’s hotels will ensure that Victoria Falls is able to meet the exacting needs of not only the international tourism market, but the business community as well,” he concludes.

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Meeting point Georgia is an ancient gateway between Asia and Europe. United Airports of Georgia’s CEO, Ketevan Aleksidze, spoke with Jonny Williamson about the growth taking place in the country’s aviation sector.

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ince forming in 2011 as the airports authority of the state, United Airports of Georgia (UAG) has been sharply focused on developing key aviation infrastructure and growing the country’s airline networks.

UAG owns three international airports (Tbilisi, Batumi and Kutaisi) and one domestic gateway (Mestia). TAV Georgia operates Tbilisi and Batumi, while Kutaisi and Mestia are operated by UAG. Combined, Georgia’s airports achieved passenger growth of more than 30% in 2013. This saw UAG’s passenger numbers reach 1.8 million, up from 1.4 million in 2012.

And the good news has continued in 2014, with the first quarter notching up growth of 20%, and signs point to this trend continuing.

UAG’s CEO, Ketevan Aleksidze, told Routes News that Turkey, Russia and Ukraine are the group’s key markets, while the Baltic States, Poland, Israel and Western Europe are also experiencing significant growth.

In particular, business traffic is showing positive signs.

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“Business traffic is growing to Georgia, because of its strategic location, domestic connections and the increased frequency of direct flights [from key markets],” she says.

Regional hub

Located at the crossroads of Asia and Europe, Georgia’s geography is an advantage on which UAG is looking to capitalise.

Ideally situated between Europe to the west and Asia to the east, Aleksidze believes Georgia can profit from being a major transfer point between the two regions.

To realise this, Aleksidze hopes to see more airlines launching direct flights from UAG’s airports.

Group growth strategy

While Georgia’s geography gives it a natural advantage, UAG is not resting on its laurels when it comes to growth.

The group’s growth plans are based on a three-pronged approach: improving the group’s aviation infrastructure; positioning Georgia to become a regional hub; and raising awareness of the country’s tourism potential.

Aleksidze cites the construction of Kutaisi International Airport, the country’s and region’s first low-cost airport, as one of UAG’s biggest achievements.

Ketevan Aleksidze

In its first full year of operation in 2013, Kutaisi’s performance exceeded expectations, handling more than 10% (188,682 passengers) of Georgia’s total aviation market of 1.8 million.

“The airport made dramatic leaps forward in 2013 and judging by 2014 to date, its share is likely to double to 20% by year-end,” Aleksidze says.

Kutaisi International is located in Georgia’s second biggest city and opened in September 2012. The low-cost gateway’s facilities include a 4,000sqm terminal building designed by renowned Dutch architect studio UNStudio, as well as a new traffic control tower and office buildings.

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Georgia The airport’s European design symbolises UAG’s focus on growing partnerships with Europe’s leading low-cost carriers, including Wizz Air. Wizz Air was the first LCC to start serving Georgia, carrying 173,000 passengers through Kutaisi in 2013.

“Wizz Air is a good example of the sort of partnerships we wish to create,” Aleksidze says. “We started with the aim of opening up previously untapped Eastern European markets and we’ve steadily grown together.”

What’s in a name?

Kutaisi Airport’s full name is King David the Builder Kutaisi International Airport, after David IV, who is considered Georgia’s most successful ruler.

Georgia’s airline network

Improvements have been made at other Georgian airports, with Tbilisi and Batumi recently getting infrastructure and terminal upgrades.

The two airports each experienced 20% growth last year and Tbilisi, in particular, is seeing an increase in frequencies.

Aleksidze says expansion plans that will allow for increased capacity at the capital’s airport are already being considered.

Together, Georgian airports offer 35 direct connections to major destinations in CIS, Europe and the Middle East. UAG is hopeful it will be able to add new routes to the Americas in the next two years.

Twenty-nine airlines currently serve the group’s airports, including international carriers Air Baltic; Alitalia; China Southern; Flydubai; Lufthansa; Qatar Airways; S7; Turkish Airlines; and homegrown Georgian Airways.

Wizz Air and Pegasus currently operate the largest number of low-cost flights within Georgia, and Aleksidze says expanding low-cost traffic is a top priority for the group.

The CEO is confident Georgia’s business environment is conducive to attracting new LLCs. “The ease of setting up and conducting business here is simple thanks to an uncomplicated regulatory framework and down-to-earth bureaucracy. Georgia is also the region’s only country to have become part of the Open Skies agreement, another key attraction for LCCs.”

China opportunity

China is one of the countries from Asia that UAG is focused on, due to its huge market potential and its growing interest in Georgia. The airport group is in active negotiations with a number of major Asian airlines and believes there are a number of routes that hold promise.

Raising awareness

Since its inception, raising the group’s profile and that of Georgian aviation and tourism in general has been a key focus for UAG. It has attended and exhibited at a number of global aviation and tourism events, most recently April’s Routes Europe. UAG also joined ACI Europe last October and participated in its 78th committee meeting in January.

The CEO says hosting Routes Silk Road is an opportunity to showcase Georgia to key airline decision-makers. The event will also allow delegates to personally experience what Georgia has to offer.

“I always say that an airport is not only the doorway to a country, but a chance to create a strong first impression for customers and business partners,” she concludes.

“The better we can serve the airlines, the better they can serve their passengers and that’s of crucial importance for us.”

Tbilisi’s top five Make the most of your time in Tbilisi at Routes Silk Road with these top experiences and attractions.

Narikala Castle

Almost as old as the city itself, this ancient fortress has been extensively expanded over the years and is considered one of Georgia’s most important cultural monuments.

National Botanical Garden of Georgia

The centuries old garden has more than 4,500 plant groups spread over 161 hectares. Divided by the Tsavkisistskali River, several bridges connect the two sides.

Tbilisi Old Town

Although much of the city has been redeveloped and modernised, the historic district is the best way to appreciate Tbilisi’s rich past.

Anchiskhati Basilica

Belonging to the Georgian Orthodox Church, the building is the oldest surviving church in Tbilisi.

Traditional bath and massage

The region is known for its numerous sulphuric hot springs.

Tbilisi was originally founded around the fourth century, with the city’s name being derived from the Old Georgian word for warm (tpili).

HEAR FROM THE CEO

Ketevan Aleksidze will be speaking at the Routes Silk Road Strategy Summit on Sunday, July 6.

routesonline.com

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25

Wizz Air

Gee Wizz, time flies

4 KEEPING IT SIMPLE

izz Air recently celebrated its 10th birthday.

W Its network now encompasses cities in Russia, the UAE and Azerbaijan. Routes News looks at five essential facts about this growing carrier.

1 10 YEARS OLD THIS YEAR

A decade ago, on May 19, 2004, Wizz Air launched its first service from Katowice in Poland to London Luton.

Today, Wizz is one of the largest airlines at the London airport, operating to 27 destinations in 13 countries.

It has carried more than 16 million passengers from London Luton alone and in total has carried more than 69 million passengers across its network in the past decade.

2 STEADY HAND

While the cut and thrust of airline management sees CEOs at other airlines come and go at a rapid rate, Wizz Air’s CEO, József Váradi, has been with the LCC from the very beginning.

Váradi, a former Malev CEO, was among the core group of six executives who conceived the airline in June 2003. Today, the LCC employs more than 1,700 people and is still led by Váradi.

3 GROWING NETWORK

Wizz Air is the largest low-cost airline in Central and Eastern Europe, operating more than 300 routes to 96 destinations across 35 countries. It has managed to operate profitably in a region that has seen the demise of long-standing airline brands such as Malev. The LCC has 17 operating bases in Gdansk, Poznan, Katowice, Warsaw and Wroclaw, in Poland; Budapest in Hungary; Sofia in Bulgaria; Bucharest, Cluj-Napoca Targu Mures and Timisoara in Romania; Vilnius in Lithuania; Kiev and Donesk in Ukraine; Belgrade in Serbia; Prague in Czech Republic; and Skopje in Macedonia.

From left: A decade of growth: Simon Harley, business development manager, London Luton; Daniel de Carvalho, corporate communications, Wizz Air; Daniel Bicknell, ground operations manager, Wizz Air; and Oliver Jaycock, marketing manager, London Luton.

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Wizz Air operates a single type A320 fleet , made up of 48 aircraft with an average age of three years. It has orders in place that will see its fleet grow to 132 aircraft by 2017, to support further growth.

While the LCC operates a huge number of routes across Europe, the Wizz Air Group is structured to include two airlines – Wizz Air Hungary and Wizz Air Ukraine. This winter its Ukrainian arm will operate 16 routes to six different countries from its two bases in Ukraine in Donetsk and Kiev.

5 STRETCHING ITS WINGS EASTWARDS In 2013, Wizz Air made history when it became the first LCC to launch scheduled services to Dubai’s Al Maktoum Airport at Dubai World Central. The new Dubai routings came after the carrier launched a new flight from Budapest to Moscow Vnukovo in September 2013.

The new Moscow and Dubai services form part of the LCC’s ‘Go East’ expansion programme.

This has seen it stretching its network to include services from Budapest to Ukraine, Israel, the UAE, Azerbaijan, Turkey and Egypt.

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27

Flynas

Flying east Saudi low-cost carrier Flynas has an ambitious long-haul expansion strategy, underpinned by new flights to the UK, writes Justin Burns.

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audi Arabia is best known for being home to Mecca – the capital of Islam. As a result, Muslims from all over the world aim to make this important pilgrimage at least once in their lives.

It is this steady flow of passengers that Saudi-based LCC Flynas is hoping to tap into with its new flights to Europe.

The airline launched long-haul flights in April with budget flights from Jeddah to the UK. The privately funded airline operated its first services to London Gatwick on April 8, and Manchester on May 2.

Flynas is operating three flights a week to both UK cities, as part of its ambitious ‘Global Flight Routes’ programme. It has also become the first LCC to serve the Saudi market from the UK. Last year, Flynas handled 3.3 million passengers, but it hopes to grow that to five million this year and has set an ambitious target of reaching 20 million passengers a year by 2020.

Raja Azmi, Flynas CEO, told Routes News that the UK routes were introduced after research showed there was high

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demand for affordable fares to popular destinations from the Middle East.

Azmi says Flynas’ main source market will be religious passengers visiting Mecca, but he believes the LCC can also start to attract leisure and business travellers.

“It’s no surprise the UK was the first country to be picked in Europe for expansion of our route network,” he explains. “London continues to feature at the top of Saudi Arabia’s most popular outbound destinations especially during summer and key holiday periods.”

Rebranding

Flynas was started as nasair in February 2007 when it began offering domestic and regional budget flights. The carrier was rebranded Flynas in 2013.

Headquartered in Jeddah, it is owned

by National Airline Services Holding, which has a 63% stake, and Kingdom Holding holds the rest of the airline.

Azmi says he is hoping 2014 will be a landmark year for the carrier, which is aiming to be profitable for the first time in seven years.

Raja Azmi

“The shareholders have relatively deep pockets, but we would like it to be publicly owned and to be the people’s airline in a couple of years,” he explains.

Azmi notes that while expansion might seem ambitious, now is the time for the carrier to make the move into long-haul. “We had a tough time initially as we were required to do what they call public service routes. There was really no support in a sense, and we do not receive fuel subsidies like Saudi Airlines.

“I think we are ready now to move into long-haul, and we have decided to expand into this new world,” he says.

Expanding route network

Flynas currently serves 29 destinations and chose Gatwick as its first long-haul route due to the UK capital’s popularity with Saudis.

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Flynas

“There is two-way traffic to Gatwick, and when we decide to look at destinations we see whether we can fill up the aircraft, especially during low season periods,” he says.

Azmi says a flight to Manchester also made sense. “We noticed there is a lot of Saudis studying in Manchester, combined with strong VFR and religious traffic too.”

The CEO believes frequencies on the routes will soon increase, and he forecasts five or six flights a week to Gatwick next year.

Flynas’s expansion includes new three weekly flights from Jeddah to Paris, Kuala Lumpur, Jakarta, Karachi and Casablanca.

“In terms of long-haul, we will be building destinations based on volume from both sides and everywhere in the world is open to us. Primarily after this we will look at Africa and India and maybe even China,” Azmi says.

Saudi’s economic strength

The Saudi airline market has been booming in recent years, and Azmi says it grew by around 6% in 2013, with similar growth rates forecast for the next five years.

“The economy is driving growth.

The propensity to travel is very high

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>>> FLYNAS FAST FACTS • Bases in Riyadh and Jeddah • 2 7 aircraft: 24 A320s and three A330s • 29 destinations in 12 countries • 950 weekly flights • M ore than 2.9 million Facebook likes

during Saudi holidays and the Saudi middle class is growing very fast,” he says.

Competition is, however, high, with heavyweight carriers Qatar Airways, Gulf, Etihad and Emirates all servicing the kingdom, along with state-owned Saudi.

Azmi explains: “It is a very competitive market, but we don’t mind competition – although it has to be on a level playing field. Saudi get fuel subsidies along with other state-owned airlines, but we are doing fine and growth has been good.”

Fleet expansion

In order to support route growth, Flynas will add more aircraft over the years to cope with new routes and destinations.

“Long-haul will be serviced by the A330 and regional routes by the A320, but we will try to stick to a single aircraft type, as we had difficulties in the past when we were running an Embraer and A320s.”

The carrier now operates 24 A320s, and leases three A330s. It is hoping to negotiate its firm order for 20 A320s, plus 18 options in favour of A330s or A350s.

In the long-term, Flynas has ambitious plans to expand its fleet to 60 aircraft by 2020, and is also in talks with Boeing over potential aircraft purchases.

Here for the long-haul

With low-cost, long-haul carriers growing in other parts of the world, however Azmi is under no illusion about the massive challenge facing Flynas, but he is confident of success.

“The jury is still out on the long-haul low-cost model, but we believe it will be successful for us and there is a market out there, with pilgrimages and a growing affluent Muslim economy.

“We are based in Jeddah, a highly desirable destination, we offer affordable competitive fares and our service levels are good, if not better than others.

“I am bullish that the entrance into long-haul will work for us and be a success,” he concludes.

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UP, UP and away l Al has responded to the opening of the skies between Israel and the E European Union with newly launched low-cost brand UP, Martin Rivers reports.

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ast year’s signing of an Open Skies treaty between Israel and Europe may have been good news for passengers, but among local operators, it immediately raised fears of a rapid influx of foreign low-cost competitors.

Mindful of the potential for losing market share, Israeli flag carrier El Al began operations under a new lowcost brand, UP, in March. The offshoot launched with a fleet of five repainted B737-800s, taking over from the mainline unit on flights to Berlin, Budapest, Prague, Kiev and Larnaca.

“Those markets are much more oriented towards leisure and VFR traffic,” says Stanley Morais, El Al’s deputy director for international affairs. “That’s why we are launching UP with those destinations. But it’s not a subsidiary, it’s not a separate company. It’s a secondary brand to distinguish the product from the legacy product. The crew are still El Al,” he insists.

That point has been repeatedly stressed to Israeli customers, many of whom fly with El Al because of its unrivalled security reputation. Israel’s unique geopolitical identity makes terrorism an obsession for the flag carrier, spurring precautions such as double cockpit doors, armed marshals and psychological profiling at check-in desks.

Such measures attract a heavy price tag, which is why the Open Skies deal was so strongly opposed by domestic operators. Workers from the country’s three main airlines – also including Arkia and Israir – went on strike last year in an attempt to block the deal. Their concerns were ultimately dismissed, with the Israeli government seeing benefits

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from increased competition and scope for tourism growth. But they did win concessions such as lifting the State’s security subsidy to 97.5%.

Five B737-800s: UP’s current fleet

First LCC foray

For Israel’s flag carrier, UP marks a crucial experiment into the compatibility of its higher cost structures with the low-cost business model favoured in Europe. The brand has undertones of British Airways’ no-frills venture Go, which tried to defend market share from emerging low-cost rivals in the 1990s.

“Open Skies has pushed us to launch this strategy, but we were planning it for several years before,” explains Einat Yanai, El Al’s marketing director. “The Israeli customer has changed. Not only in the aviation industry, but in general.

Israelis are now more knowledgeable, they research more, and they are very sensitive to price.”

There is no question that UP will steer clear of the ultra-low-cost model pioneered by Ryanair, and later Wizz Air. The airline’s basic ticket may be a stripped-down product with all the usual ancillary surcharges for baggage and refreshments. But its ‘Smart’ offering falls within the premium economy category, including a free baggage allowance, lounge access, extra legroom and flexible booking conditions.

Bells and whistles

Noting that the mainline unit has now ceased flying to the markets served

by UP, Yanai stresses El Al has been careful not to alienate higher-yielding passengers who expect “all the ingredients” of a full-service flight.

As well as benefiting from premium economy, these passengers can earn and redeem points on El Al’s Matmid Frequent Flyer Club. Benefits will vary according to tier status, ensuring the loyalty scheme remains an “integral element” of UP’s service provision, albeit on a “different value system” from the full-service carrier.

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Israel

Open Skies has pushed us to launch this strategy, but we were planning it for several years

Turning to the route network, Morais says El Al deliberately selected a diverse range of destinations for the launch of UP in order to evaluate different market types. El Al will later decide which other services might be transferred to UP. “We will see if it could be expanded to many of the European routes,” he says, noting that full implementation of Open Skies will not be completed until 2018.

“There are also routes which we may consider flying both with UP and El Al,” he adds.

New era of competition

While the flag carrier tinkers with its new brand, more established low-cost operators are already gaining ground.

Tel Aviv’s Ben Gurion Airport is today served by the likes of easyJet, Germanwings, Niki, Wizz Air and Air Baltic.

EasyJet is the dominant low-cost carrier, having launched services to Tel Aviv back in 2009. But the signing of the Open Skies treaty precipitated a flurry of route launches, with flights from Rome, Berlin, Milan and London Gatwick all being announced in quick succession.

This summer, easyJet will fly to Israel from eight different European points, including 14 weekly flights from two airports in the UK capital. The airline flew about 330,000 passengers in and out of Tel Aviv last year, and it is targeting more than 500,000 for the coming 12 months.

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Einat Yanai

“We’re growing really quickly in Israel,” says Hugh Aitken, easyJet’s UK commercial manager. “This summer alone we’re adding Gatwick, Milan and Berlin, and those three are directly as a result of the Open Skies agreement.

There’s a bit of maturing across the existing routes, but the big change for us has been Open Skies.”

In a sign that cheaper airfares are beginning to ignite demand, a survey conducted by easyJet found that onethird of passengers on its Israeli services are visiting the country for the first time.

But easyJet too faces stiff competition from other operators. Wizz Air has only been flying to Tel Aviv since December 2012, and yet by this summer the number of points it serves from the city will have ballooned to nine (including Lviv, operated by subsidiary Wizz Air Ukraine).

The most interesting routes to watch may be those plied by more than one low-cost carrier. Budapest and Prague will be served by both UP and Wizz, for example. But El Al’s Yanai downplays talk of a price war for budget tourists.

“If Wizz offers a route with a €39 price, we wouldn’t do that,” she says.

Instead, UP will offset its higher cost burden by leveraging the security credentials of El Al, and reaching out to domestic customers that value the brand.

“We will be very price-competitive, but we never said that we will be the cheapest company,” Yanai concludes.

“We want to be very clear that UP is by El Al, and Israeli customers like to fly with El Al. They feel the most secure with their flag carrier, and they are willing to pay a premium for security.”

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Nile Air

Egypt’s Nile Air defies downturn espite a steep drop in tourism traffic to Egypt, Nile Air, D the Cairo-based scheduled carrier founded in 2008, plans to double its fleet size and add several new destinations this year.

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hief executive Ahmed Aly, says the privately owned Nile Air has been shielded from the downturn by its diverse customer base and Middle Eastern route network. The airline flies from three points in Egypt to five Saudi Arabian destinations plus Kuwait.

“We’ve got a very good spread of passengers,” Aly, formerly head of network planning and strategy at Etihad Airways, tells Routes News. “Tourism from the Gulf has held up much better than from Europe. There’s also a large diaspora of Egyptians living in Saudi Arabia and Kuwait, so we’ve got strong VFR traffic. And we see Umrah and Hajj religious traffic being extremely resilient.”

Nile Air’s existing fleet of two A320s will grow to four units this year, with Aly eager to expand its regional footprint, as well as enter European and African markets.

The airline launched flights from Cairo to Jeddah in March, and is planning a new service from Luxor to Kuwait this summer. But the expansion of the fleet will pave the way for much larger growth,

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with Turkey, Italy, the UK, the UAE, Libya and Sudan all being evaluated as possible future destinations.

“The Egyptian market is highly dynamic,” Aly says of the country’s wider prospects. “Notwithstanding the current changes in the political landscape, we’ve got strong potential.”

Tourism numbers to the North African country are down by 28% so far in 2014, following three years of contraction or stagnant growth amid widespread civil unrest. The overthrow of President Hosni Mubarak in the 2011 Arab Spring kickstarted the troubles, with a temporary increase in visitors the following year being quickly reversed by last summer’s military coup. Recent terror attacks in the North Sinai region have further jangled nerves.

But Aly insists the fundamentals underpinning the country are favourable.

“Egyptian aviation is in a strong position given the strong characteristics of the Egyptian market – a tourism destination with global appeal, a large population centre, a regional power and its geographical location,” he says. “I believe

now, as stability returns to the country, we’ll see a strong rebound and growth.”

The chief executive adds that, although liberalisation of the aviation sector has been “slower than in other countries in the region”, the Egyptian authorities made crucial progress in March when they opened up the Cairo–Jeddah market.

Ending the duopoly enjoyed by flag carriers EgyptAir and Saudi Airlines on the route marked a “very significant strategic step”, he says, describing it as the largest origin-and-destination market in the Middle East.

Political relations between Egypt and Saudi Arabia have improved noticeably since the 2013 overthrow of the Muslim Brotherhood, and Aly points to “much stronger volumes coming out of Saudi Arabia” in this summer’s bookings.

Nile Air last year reconfigured the business class cabins on its A320s down from 16 to 8 seats, lifting the type’s overall capacity to 164. That precipitated a 21% increase in annual passenger numbers to nearly 350,000, with load factors growing to 72%.

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Routes Europe tes Delega from

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Europe means business The biggest ever Routes Europe included an exclusive keynote address from Air France’s CEO and more meetings between route planners from the region’s airlines and airports than ever before, writes Justin Burns.

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he largest ever Routes Europe took place in France’s second most populous city, Marseille, from April 6–8. Industry players packed into the 1850s-built former residence of Napoleon III, the Palais du Pharo, to hear keynote speaker Air France chairman and CEO, Frédéric Gagey, where he urged airports and airlines to “work hand-in-hand”.

Gagey highlighted results from the Air France’s ‘Transform 2015’ plan, the state of the industry in Europe and the financial situation of France’s flagship carrier. ”I have always been convinced airlines and airports should be seen as two sides of the same coin. They need to stick together to create value. As you know, however, this is easier said than done.”

Gagey also explained that he expects Air France to break even and return a small profit in 2014, after six years of consecutive losses, which he said would be a success.

Gagey said Air France’s recovery plan and return to profitability was largely due to a 15% reduction in staff numbers through voluntary departures, while product enhancement and customer focus are the cornerstones of the recovery plan.

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The CEO used the forum to warn that airlines in Europe need a level playing field to remain competitive and said European legislation and regulation prevents them from competing globally.

He said: “Some people take it for granted that Europe will retain its major airlines and its hubs. It won’t.”

In his view, regulators need to consider taxation carefully, must expedite the Single European Sky and ensure all players in the same country abide by the same rules.

Other issues discussed in the Strategy Summit were the LCC market, which was debated in session one of the summit, ‘Lowcost carriers – the next frontier for innovation.’

Speakers explained the current European LCC market, and how carriers are likely to employ new strategies to differentiate themselves from each other in the highly competitive sector.

The summit’s second session focused on government policy, and speakers gave their views on what they say are restrictive regulations, high taxes and unfair subsidies, which are stifling competition in Europe, and they urged lawmakers to reform aviation policy.

115 AIRLINES

Westjet eyes widebodies Canadian low-cost carrier WestJet revealed at the Strategy Summit it was “closer than ever” to formalising a deal for widebody aircraft.

Speaking in the panel discussion during a session entitled ‘Lowcost carriers – the next frontier for innovation’, John Weatherill, director, network and schedule planning, at WestJet, said the airline had looked at introducing widebody aircraft many times over the years.

Weatherill explained that WestJet sees long-haul as a “solution to a problem” and added there is sufficient demand on routes from Canada.

“We are probably the closest we have ever been to making a decision and feel the combination of low-cost, long-haul, with the strength of our own network behind it, presents an opportunity,” Weatherill said.

WestJet has been actively studying the possibility of long-haul services, and will be launching its first transatlantic route this summer when it inaugurates flights between St John’s in Newfoundland and Dublin in Ireland.

Etihad’s Vijay Poonoosamy (left) was among the speakers at the Strategy Summit.

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SAS ups US frequencies

Bremen triumphs The Routes Marketing Awards at Routes Europe saw City Airport Bremen being crowned overall winner.

The German airport will now be automatically shortlisted for the World Routes Marketing Awards, which will be announced in Chicago in September.

Speaking after the awards, Florian Kruse, director sales and marketing, City Airport Bremen, could not conceal his delight.

“We are absolutely delighted about the win. The whole team has done an absolutely amazing and wonderful job over the past year and across the first months of 2014 and have collectively invented our current marketing campaign,” he said.

The shortlisted finalists were nominated by airlines, before a panel of judges from the airline network planning community in Europe reviewed each submission to decide the winners.

Over 20 million passengers

Winner: Copenhagen Airport Group

Highly commended: Amsterdam Schiphol and Frankfurt Shortlisted: • Barcelona El Prat • Rome Leonardo da Vinci Fiumicino • Moscow Sheremetyevo

Under 4 million passengers

Winner & overall winner: City Airport Bremen

Highly commended: John Paul II Int’l Airport KrakówBalice and Shannon Airport Shortlisted: • Begishevo Airport • David the Builder Kutaisi International • George Enescu Int’l Airport, Bacău

4 – 20 million passengers

Destination marketing award

Winner: Brussels Airport

Winner: Valencia Tourism

Highly commended: Athens International Airport and Prague Airport Shortlisted: • Catania Fontanarossa • Istanbul Sabiha Gökçen Int’l

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Highly commended: Stockholm Visitors Board & Convention Bureau Shortlisted: • Malta Tourism • Polish National Tourist Office • Promote Iceland

380 AIRPORTS

Scandinavian Airlines (SAS) revealed during Routes Europe that it would boost flights to World Routes host Chicago, as well as adding frequencies to other US cities.

SAS will add five additional frequencies between Scandinavia and the US with extra flights on the Stockholm–Chicago, Copenhagen– San Francisco, Stockholm–New York and Oslo–New York routes.

Rickard Gustafson, SAS president and CEO, said in a statement: “SAS is seeing a steady growth in demand for travel to the US, and the reverse route to Scandinavia, particularly from Chicago, is also proving a success.

“It is exactly one year since we launched the San Francisco route, and we have never before seen a route be so successful right from the off.”

Routes Europe UK debut The 10th Routes Europe will be held in the UK next year, hosted by Scotland’s Aberdeen City and Shire, from April 12–15.

A £15 million redevelopment is already under way at Aberdeen International Airport (AIA), designed to transform the customer experience.

AIA managing director, Carol Benzie, said: “All eyes are now firmly on Aberdeen as we prepare for 2015.

“The arrival of the event in the North East of Scotland next year will mean a lot for the airport and the wider region that we serve.”

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Kilimanjaro

New heights Kilimanjaro International has celebrated air services success by attracting Qatar and Turkish – now it believes Africa as a whole is poised for a new era of route development, writes Lucy Siebert.

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frica is entering a new phase of professional route development, believes the managing director of last year’s Routes Africa Routes Marketing Awards winner.

Mattijs Smith, managing director of Kilimanjaro Airports Development Company (KADCO), operator of Kilimanjaro International, says last year’s award win was a “big success” for the airport and had “a real effect on the community and the people who work at the airport”.

Speaking to Routes News from his office at the airport, outside Arusha in Tanzania, Smith says: “When we came back from the event, everyone was dancing and celebrating – we really saw the importance of the award. It was recognition for all the hard work that everyone had been doing and it was validation that we were doing the right thing with our route development. It was a confidence boost for the whole company.”

The award came after Qatar Airways launched new daily service to the airport in July 2012, and ahead of Turkish Airlines arriving with five weekly services in December 2012. Turkish has since upped its frequency to daily.

After the launch of these two major new services, in 2013 the airport handled

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Kilimanjaro International Airport is investing $36.4 million in a major rehabilitation project, scheduled to get under way before the end of 2014. The project is being co-funded by the Dutch and Tanzanian governments.

825,000 passengers – nearly a 25% increase on the previous year.

“We are heading to the major milestone of one million passengers, but we probably won’t introduce another new carrier this year,” says the managing director.

Smith adds he is confident other African airports are starting to follow Kilimanjaro International’s professional approach to route development.

“Within the African airport environment they are just starting to realise the delicate decision-making that happens when an airline decides to operate on a route. Our success shows all the other African airports that [a route development strategy] works and it’s not just theory,” says Smith.

Kilimanjaro International’s small route development team is headed up by Christine Mwakatobe, who leads business development, and the team is

supported by international consultants InterVISTAS. Smith says this support has been vital to the airport’s success.

“They [InterVISTAS] are doing in-depth data analysis and that is something that is not easy in Africa,” he says.

While the Kilimanjaro team has worked hard at its route development efforts, Smith acknowledges that it has a natural advantage, thanks to its unique location.

“We have a very clear proposition as a tourist destination in one of the most beautiful places in the world. We are served by scheduled carriers, and a large part of our traffic also comes from charters. We get charters from the UAE and we have even had a Qantas 747 – that is great to see on the tarmac here.”

Looking ahead, the Middle East remains an important market for Kilimanjaro, but Smith acknowledges the need to ensure the existing carriers are able to make the route a success before additional services are introduced.

Smith says the airport remains in conversations with Emirates, but notes that flydubai might be more of a realistic prospect.

“We are always interested in having other carriers from Europe, and Southern Africa is also a big market for us too,” he adds.

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Events essentials

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Emirates to share insight at World Routes

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Emirates has soared to heights that few would ever have imagined 25 years ago.

This year its chairman, Sir Tim Clark, will be among the speakers at the World Routes Strategy Summit.

This year the World Routes Strategy Summit, which includes industry leaders from the world’s airports, airlines and associations, will run over the Sunday and Monday of the event.

CONFIRMED SPEAKERS INCLUDE: Sir Tim Clark, CEO, Emirates Jim Compton, vice chairman & chief revenue officer, United Airlines

Tewolde Gebremariam, CEO, Ethiopian Airlines Angela Gittens, director general, ACI World

Rosemarie Andolino, commissioner, City of Chicago Aviation Department Jude Bricker, SVP planning, Allegiant Travel Company

Antonio Miguel Marques, CEO, Sao Paulo – Guarulhos

Josh Marks, CEO, masFlight

World Routes returns to China in 2016 China will host the World Route Development Forum for the second time.

Chengdu Shuangliu International Airport has been named host of the 22nd World Route Development Forum in 2016, following a highly competitive bid.

Chengdu Shuangliu is the largest aviation hub in the central western region of China, with 220 routes.

In 2013, the airport handled over 33 million passengers, making it the fifth busiest airport in China.

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The airport is also familiar with hosting Routes events, having successfully hosted Routes Asia 2013.

Li Wei, board chairman of Sichuan Province Airport Group said: “UBM has given Chengdu Airport an excellent opportunity to stand in the central stage of the world aviation industry and will make every effort to present an amazing and unforgettable event to every delegate attending World Routes 2016.”

Katie Bland, director of Routes, added: “Chengdu is the centre of politics, commerce, trade and technology and the hub of transportation and communication in central-western

China, authorised by the State Council of China. Chengdu is highly accessible via Chengdu Shuangliu International Airport, China’s fourth largest aviation hub. 2016 is a good time for World Routes to return to China and Chengdu provides the perfect platform.”

The 2016 event is expected to attract more than 3,500 delegates, including 350 airlines, 1,000 airports and 300 tourism authorities from more than 125 countries. It will be held in the state-of-the-art International Convention & Exhibition Centre at Chengdu Century City and will take place from September 25–27, 2016.

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Events essentials Routes Africa 2014

Victoria Falls, Zimbabwe 22-24 June 2014

Routes Americas 2015

Denver, Colorado, USA 01-03 February 2015

MEET THE TEAM

Routes Silk Road 2014

World Routes 2014

Chicago, Illinois, USA 20-23 September 2014

Tbilisi, Georgia 6-8 July 2014

Routes Asia 2015

Kunming, Yunnan, China 15-17 March 2015

Routes Europe 2015

Aberdeen, Scotland 12-14 April 2015

Sallyanne Collins reveals changes to this year’s World Routes format and shares what it really takes to get her through a Routes event.

What is your main responsibility at Routes?

I’m head of commercial, which means I’m responsible for delivering the world’s airports, tourism authorities and key industry suppliers to World Routes.

What changes are planned for World Routes this year?

Sunday will become a full business day to allow for more pre-arranged meetings and lunch will be provided.

In addition, the World Routes Strategy Summit will also take place on Sunday and Monday, while the Tourism Summit will take place on Monday.

Why is World Routes being hosted in Chicago so significant?

Chicago is a true global aviation hub and the event will coincide with the 70th anniversary of the Chicago Convention and 100 years of commercial aviation.

What are you most looking forward to at World Routes in Chicago?

Meeting friends old and new.

What are your World Routes essentials?

Lip balm and many pairs of shoes.

Durban warms up for 2015

Key members of the Routes team recently travelled to Durban in South Africa to meet with the World Routes 2015 hosts. The trip coincided with the annual INDABA trade show at the Durban International Convention Centre, the same venue for World Routes 2015. One of the sights that the team checked out in the sunny coastal city was the Moses Mabhida Stadium – one of the FIFA World Cup 2010 stadiums.

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p o t e h t m o r f w ie V NAME ORGANISATION WEBSITE YEAR FOUNDED

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eneral TALEB RIFAI, secretary-g on (UNWTO) World Tourism Organizati www2.unwto.org

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Sta er mb on, Community (SADC) Me strengthening our co-operati ing Countries (LDCs) elop Dev st Lea in tly we can work more efficien

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