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FlyNas Aims to Create Low-Cost, Long Haul Hub in Saudi Arabia

FlyNas route map from Jeddah.
FlyNas website

Saudi Arabia’s FlyNas ended the domestic monopoly of the kingdom’s flag carrier Saudia in 2007, and it’s now aiming to break the stranglehold of the long-haul Gulf airlines too.

The low-cost operator intends to launch flights from Riyadh to London Gatwick, continuing its plans to build a long-haul operation from the kingdom. The Saudi-based carrier has this year launched flights to London, Manchester, Casablanca, Kuala Lumpur, Jakarta and Surabaya in Indonesia, all from Jeddah.

These flights have mainly targeted religious tourism, but now the carrier is marketing to business, leisure and transit passengers traveling from the East to the West who seek a cheaper priced ticket. It’s early days, but the airline reckons it can take a tiny piece of the market share of the likes of Emirates Airline and Qatar Airways by transiting passengers in Jeddah, where a new airport is being built.

“It’s been very encouraging so far,” said Wael Al Sarhan, the marketing director for FlyNas. Mr. Sarhan would not disclose the load factor on the new long-haul flights, but said the operation was expected to be profitable at year-end, helping offset weakness in the domestic market.

FlyNas has almost had to launch long-haul out of necessity. The government in Saudi Arabia sets the prices of flights and offers government-owned Saudia cheaper fuel, making it a difficult job for FlyNas to compete domestically.

Qatar Airways will launch a domestic operation in the kingdom later this year, which Mr. Sarhan hopes will open up the market to more competitive prices or favourable fuel deals with the state.

In any case, the low-cost carrier has ambitious plans to make long-haul a success. FlyNas has a goal of flying 20 million passengers by 2020 with a fleet of 60 aircraft. It flew 3.3 million passengers last year and will have a fleet of about 27 leased jets by the year end. FlyNas is in negotiations with Airbus Group NV to buy 20 A320neo jets, Mr. Sarhan added.

The carrier’s low-cost roots might just be questioned as it expands long-haul. It offers a business class product that comes with entertainment, and economy serves food and drinks as part of the ticket price. “When you are operating on long haul, you are competing with other airlines so you have to offer the full service,” said Mr. Sarhan. “We still think that we are a low-cost carrier.”

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(via WSJ Blogs)