With unprecedented global air travel fuelled by the economic boom in emerging markets such as China, India and the Gulf, the aviation sector has never seemed more lucrative. On Tuesday, for example, Prestige Jet was launched out of Abu Dhabi to run private jets and this region has also seen Sharjah-based Air Arabia grow from strength to strength since its launch in 2003.
However, the process of new airlines getting off the ground and staying in the skies may not be that easy. MAXjet Airways ceased operations on Monday – leaving jets on tarmacs and stranding passengers – as the all-business class airline said it would file for bankruptcy protection. MAXjet blamed soaring fuel prices and the deteriorating credit market for the “drastic measure”.
But analysts said the company’s failure may raise questions about the viability of all-business class airlines.
MAXjet launched in 2005 and offered ‘all-premium’ flights between London Stansted, New York, Las Vegas and Los Angeles. But analysts said it could not compete with deeper-pocketed rivals such as American Airlines. “High fuel prices were a contributing factor, but American’s inauguration in October of [service between New York’s John F Kennedy International Airport and London’s Stansted Airport]… was the coup de grace,” said Robert Mann, an airline consultant in Port Washington, New York.
While business class service can be very profitable to airlines, it is also a very “thin” market, Mann said, serving, typically, “40 to 70 seats per flight, depending on the route and aircraft”.
Any loss of market share to a competitor can be devastating, particularly to an all business-class carrier like MAXjet that did not have revenue from economy passengers – or a robust route system – to fall back on.
“They could not get the current premium class passengers away from major carriers,” said Mike Boyd, president of The Boyd Group, an Evergreen, Colorado, airline consultancy.
Analysts suggest flyer loyalty – to bigger carriers – makes the model followed by MAXjet and international rivals like Silverjet and Eos.
“The business class challenge is that there’s strong brand loyalty [frequent flyer programmes], plus there’s some corporate deals major carriers offer,” Boyd said. “These off-brand all-premium carriers will struggle.”
Could these challenges also be applied in this region where Prestige Jet and other potential operators hope to capitalise on the sector’s growth?
Dubai-based ArabJet is a proposed all-business class carrier that has already postponed its launch date twice. Speaking to Emirates Business, Mohammed El Shanti, the airline’s chief executive officer, disclosed the challenges he has faced.
So, will ArabJet be flying anytime soon? “Yes,” says El Shanti, seemingly undaunted by the challenges that his company has faced over the past couple of years.
“We have no reason to believe that it [ArabJet] will not fly out of Dubai. At the moment, we have about 10 UAE investors, who are dealing with us professionally and are willing to provide the initial $50 million [Dh183.5m] startup capital. It is difficult to say when we will definitely launch but if things work out well, we are looking at the next six months,” he said.
Richard Aboulafia, of Teal Group Corp, a US-based aerospace and defence consulting firm, said ArabJet’s delay is not an exclusive case.
“Many all-business class carriers have failed or been delayed all over the world. I don’t think ArabJet’s delay reflects poorly on the UAE. Most countries are judged by their national champion carrier, for better or worse. One reason business-class carriers would have a tough time in the UAE is that the national airlines, especially Emirates, do a terrific job catering to business travellers.
Another newcomer, Kang Pacific Airlines (KPA), has made monthly changes to its launch schedule since it went public about its plans in August. KPA’s self-made claims as the ‘fifth airline of the UAE’ and ‘the airline of Fujairah’ have also put it in a controversial light, particularly following official statements from civil aviation authorities that it has not yet applied for the required air operator’s certificate. But KPA’s founder, Indian businessman Paul Kang, seems determined on proving that this airline can and will fly out of Fujairah.
In November, the airline sponsored advertisements on their official website, as well as on a local television network, announcing special Christmas fares for flights from Fujairah to Clark International Airport in Angeles City in the Philippines.
Although Kang refused to provide updates regarding the airline’s operations, Emirates Business has learned that KPA had put off its supposed December flight and that it is tentatively targeting late February 2008 for its maiden voyage.
Abid Riaz, aviation analyst at EFG-Hermes Dubai, said the Gulf has more than enough space for industry players like KPA wanting to tap the low-cost market.
“I guess the real issues would be whether a potential airline can create a demand that wasn’t earlier addressed and if it can implement a sustainable business model. Can it replicate the success of existing airlines and will people be willing to travel, for instance, from Dubai to Fujairah in order to avail of their service?”
Citing Air Arabia as an example, Riaz said the Sharjah-based carrier’s operational matrix successfully targeted a particular segment of the region’s travel market. “The growth of Air Arabia has been exponential – from breaking even 18 months after it was launched in 2003, to becoming highly profitable in 2006.”
In addition, Riaz said the backing of a local government can also influence the success of a startup airline. “If an airline is backed by a local government, it enjoys preferential treatment like landing rights. Airport expansion may also be undertaken to accommodate its increasing fleet.”
Meanwhile, another new entrant to the market, RAK Airways, managed to finally take off on November 29 despite a tough start. The highly anticipated fourth national carrier of the UAE had to weather three launch postponements and two changes of chief executive officers in less than two years.
UAE’s newest carriers?
ARAB JET
An ambitious business-only airline that aims to be in the same league as Silverjet (United Kingdom) and L’Avion (France), the Dubai-based Arabjet hopes to offer flights to Jeddah, Riyadh, Dammam, Manama, Amman, Cairo, Beirut, Tehran, Doha and Muscat. But in order to realise its plans of acquiring, and eventually expanding, its fleet of two leased Airbus A319 corporate jetliners, it needs a capital investment of $100 million (Dh365 million).
CEO: Mohammed El Shanti
ORIGINAL LAUNCH DATE: First quarter 2006
CAUSE OF DELAY: Failed negotiations with potential Saudi investors
CURRENT SITUATION: Co-ordinating with new investors in UAE and Qatar
NEW LAUNCH DATE: Unconfirmed
KANG PACIFIC
Attempting to set up its hub at the Fujairah International Airport, Kang Pacific has been showing an unwavering determination to launch its service to the Philippines, India, Bangladesh, Sri Lanka, and the United Kingdom. With an initial capital of $10 million (Dh36.5 million), this private low-cost carrier plans to lease a McDonnell Douglas DC-10 aircraft for its operations.
CEO: Paul Kang
ORIGINAL LAUNCH DATE: October 2007
CAUSE OF DELAY: Undisclosed
CURRENT SITUATION: Preparations are underway with bookings expected to be available by late November
NEW LAUNCH DATE: Tentatively, February 2008
RAK AIRWAYS
As the UAE’s highly awaited fourth national carrier, RAK Airways has been waiting in the wings for more than a year. Setting its hub at the Ras Al Khaimah International Airport, the airline has launched its service to Beirut and also has active plans to offer scheduled commercial flights to Bangladesh, Bulgaria, India, Nepal, Qatar, Sri Lanka and Tanzania. Its industrial objectives are backed by a substantial capital investment of $411 million (Dh1.5 billion).
CEO: Jack Romero (February to September 2006), Kishu Teckchandani (February to May 2007), Captain Khalid Almeer (July 2007 to date)
ORIGINAL LAUNCH DATE: End-2006
CAUSE OF DELAY: Acquisition of route access rights
CURRENT SITUATION: Operational
NEW LAUNCH DATE: November 29, 2007
After being tightlipped about its plans, the Ras Al Khaimah government-backed airline last month began its thrice-a-week service to Beirut, with plans to expand its route network to include Bangladesh, Sri Lanka, Bulgaria, India, Nepal, Qatar and Tanzania.
Earlier reports mentioned that, although the carrier operates charter flights to Turkey using a Boeing B757 aircraft, its full commercial launch has been put on hold following the acquisition of route access rights to India and Iran.
RAK Airways’s fitful start has not dampened its promising entry into the aviation market, experts say.
According to a Centre for Asia Pacific Aviation (Capa) report published in August, “Ras Al Khaimah is a late mover in the increasingly congested Middle East skies, but it could develop an effective niche role, particularly in the cargo segment, in the years to come”.
Undoubtedly, the UAE’s diverse economic opportunities, open skies policy and strategic location have stimulated a phenomenal growth in its aviation industry. Capa projects revenues from the country’s travel and tourism sector will stand at about $33.9bn (Dh124.4bn) by the end of the year, 65 per cent higher than the income generated three years ago.
Reference: Here
We found the journey by car from Dubai to be quite enjoyable as the last half involves passing through rolling deserts and desolate mountains. The only hassle involves navigating your way between the huge trucks that are chugging their way slowly along the highway.
Upon reaching our destination we were immediately struck by how well the resort blends in with the local landscape. Since it is only four stories high at its tallest point, the hotel does not block your view of the adjacent mountains. The grounds are also nicely spread out, so the entire resort feels roomy and relaxed.
The airy surroundings are a pleasant contrast from the beach hotels in Dubai that are growing increasingly claustrophobic as skyscrapers are being built practically on top of them. We also found it wonderful to look out at the Indian Ocean and see nothing but clear blue sea in the horizon, with not a man-made island in sight.
The hotel itself boasts 250 rooms, most of which are in the main building facing the beach. There are also two low-rise outer buildings that offer beach-front rooms.
We stayed in the main building on the second floor with a nice view of the pools and beach. Our ‘executive’ room was spacious and stylishly appointed. We also had a large balcony in which two people could comfortably stretch out.
The hotel is relatively new - it opened in April - and the room looked fresh and clean.
Our only complaint was the size of the bathroom, which was quite small in proportion to the rest of the room. Two people could not use it at the same time.
The room came equipped with an internet connection which cost Dhs25 for one hour. The hotel’s business center also had internet access, but it cost Dhs50 per hour. By contrast, free wireless internet access was available in the lobby and we saw many guests using their laptops there.
Free water sports
The hotel has a spacious outdoor pool for adults with a swim-up bar and a large kids pool with a water slide. However, for guests who want to do more than lounge around the pool there are loads of recreational activities available.
The hotel’s Waterworld marine centre offers a wide range of water sports, many of which are free, including water skiing, kayaking, windsurfing, and pedalo. Rotana claims that it is the only hotel in the UAE to offer these activities at no charge.
The highlight of our weekend was taking a glass boat ride to nearby Snoopy Island for snorkeling. The equipment and boat ride were free, and the quantity and variety of fish -including a sea turtle that swam gracefully below us - that were on view was breath taking.
In addition to water sports, the hotel offers tennis, squash, a fitness center, kid’s club, and, in another UAE first, mountain biking.
Although the hotel lost much of its beach to Hurricane Gonu, there is still a good amount of sand to relax and enjoy the view. However, if you decide to go into the ocean for a swim, be careful of the large rock outcroppings that can be hidden by the high tide. These can be especially treacherous for children. On the other hand, kids were having a great time spotting the crabs and small fish that are in abundance in the water pools that collect on the beach in the late afternoon.
Food and drink
The hotel has a limited variety of restaurants on offer. The Waves is a beach front restaurant that has a basic menu of sandwiches and seafood. The portions were good size and the quality was good.
After building up a hearty appetite following a busy day at the beach, we opted for the dinner buffet at the hotel’s only other restaurant, Mozaique. We were pleased by the quality of the food, including the Prime Rib which was tender and juicy. Seemingly every variety of food was available, including seafood, barbecue, Middle Eastern, stir fry, and Indian.
For guests seeking an after dinner drink, there is Tabu, which features a fully stocked bar and live music every night.
Reference: Here
With a staggering range of products to suit every style and budget it has become a big attraction for residents of the UAE and visitors, especially with seasonal shopping and festive celebrations.
The offer of premium and top fashion brands made available at heavily reduced prices has seen footfall at the new mall multiply rapidly since opening which has made the mall increase their trading hours.
According to the mall’s Director, Vishal Mahajan, the continuously increasing footfall in the mall and comments by all retailers that the business is much above expectations is proving Dubai Outlet Mall to emerge as one of the most popular attractions in Dubai, in the brief period since its opening in August this year.
‘We had planned on attracting a large percentage of domestic consumers to the mall - apart from international visitors & tourists - and we are pleased at the popularity we are achieving. As part of the countdown to the festive season ahead, residents from as far as Abu Dhabi, Al Ain, Fujairah, Sharjah and Ajman continue to drive to the mall everyday, apart from the obviously large percentage of people living in Dubai. Residents have been quick to catch on to the fact that Dubai Outlet Mall is a great place for seasonal or regular shopping - whether it be for themselves, their friends, family members and colleagues; to buy a special treat or to look for an elusive gift. The mall is also becoming increasingly popular with tourists and we are happy to welcome them.
‘The great advantage is that with every purchase the shoppers make at Dubai Outlet Mall, their shopping money is in fact being stretched considerably as everything they buy gives them a great bargain due to reduced prices.’ he explained. An added attraction is that Dubai Outlet Mall is located within a 20 minute driving distance from the World Trade Centre, on Dubai - Al Ain Road, Route 66.
Mahajan said his team is actively engaged in offering customers exemplary customer service, a pleasant shopping experience and special offers in addition to the discounts available at every store in the mall. As an example of this, visitors are offered a free cup of coffee as part of an incentive program to thank them for shopping during off-peak shopping hours.
A dedicated children’s play area located on the 1st floor allows adult shoppers to browse around the stores and to shop uninterruptedly, while their children are looked after. The presence of several F&B outlets well located around the mall ensures that ardent shoppers can get a well-deserved rest whenever they wish to.
Dubai Outlet Mall has more than 240 stores that are categorised by fashion (men, women, and children, unisex), shoes and footwear, lingerie and swimwear, accessories and jewellery, leather and travel goods, cosmetics and perfumes, electronics and homewares, sunglasses and watches, and sportswear and sporting goods, toys, and novelties.
Some of the larger brands and designers on offer include Azarro, Max Mara, Mango, Mexx, Ted Lapidus, Reebok, Massimo Dutti, Diesel, Calvin Klein, Guess, Evisu, Adidas, Nike, Puma, Villeroy and Boch, Rodeo Drive and Esprit, among numerous others - all made available at discounts varying between 30 and 90%.
The mall houses a food court with several known brands and cuisines, restaurants and cafes and a forthcoming attraction is the Middle East’s first Chuck E Cheese’s family entertainment centre with food, games and rides, an ice rink, a bowling alley and other novelties.
The mall is open through the week, from Sunday to Wednesday 10 am - 10 pm and Thursday to Saturday 10 am - 12 midnight.
Dubai Outlet Mall is a division of UAE-based Al Ahli Group, a multi-disciplined conglomerate founded in the late 1960s, with interests in construction, engineering, cement, plastic, printing, leisure and retail industries.
Reference: Here
UAE BALLOON Team and Sharjah Government will organise one of the dazzling displays of hot-air balloons at Sharjah skyline from Al Majaz Park from Dec.13-15.
The festival will also mark the World Lady Pilot Championship in which several international men and women pilots will take part.
The hot-air balloon festival coincides with the UAE National Day celebrations in Sharjah, Cap Aziz of UAE Balloon told The Gulf Today while participating at Zayed University’s National Day celebrations in Dubai.
Team Manager Abdulrahman Naqi said there will be 36 balloons from different countries like U K, France, Australia, Italy, Germany, Poland, South Africa and the UAE. Around 40 international balloonists will participate with different types and sizes of balloons that will take visitors up in the air for a panoramic view of Sharjah skyline, he said.
The World Lady Pilot Championship makes the show more important as women balloonists are rare.
All intrepid visitors to the festival will be allowed to fly with their families in the air. “Kids will be taken up in the air for free in balloons with different shapes such as elephant or corn,” Naqi said.
In addition, there will be many cash prizes and gifts for the visitors to the venue at Al Majaz Park in the heart of Sharjah near the scenic Khalid Lagoon on Dec. 13,14 and 15.
UAE Balloon is the first balloon festival in the Middle East. They currently have four balloons sporting the pictures of Sheikh Zayed, the UAE flag and other leaders, Capt Aziz said.
The UAE Balloon team has participated in international balloon festivals in Switzerland, South Africa, Poland, where they came out number one, Italy, Germany, Australia and Austria. Next week the team will participate in events in Denmark and Libya.
UAE Balloon is planning a new balloon depicting India, Aziz added. He, however, refused to say whose picture will be sported in the India balloon.
It is speculated that the picture of Indian national leader Mahatma Gandhi will be a preferred choice for the India balloon.
Le Méridien Al Aqah will highlight the restorative benefits of Fujairah’s natural resources to a global audience at the upcoming World Travel Market (WTM) held from 12-15 November in London.
The hotel’s dedicated exhibition space will highlight Le Méridien’s investment in a new $3 million spa, perched on the edge of the Indian Ocean and focused on total wellness for guests through the use of natural and marine elements. Visitors to WTM will also get the first look at Le Méridien Al Aqah’s plans for its Baywatch dining outlet, which is being modernized for indoor and outdoor use just steps from the coastline.
“Guest surveys have revealed that proximity to the water is among the key reasons for visiting Al Aqah and at WTM, we are highlighting the ways in which we are integrating the Indian Ocean more closely with our overall guest experience, whether through spa relaxation and wellness or dining by the sea,” said Patrick Antaki, General Manager, Le Méridien Al Aqah.
“WTM also enables us to increase awareness about Fujairah’s natural beauty as a destination and our efforts as the first five-star resort there to continue engaging and aligning our offerings with the needs of international guests,” he added.
In their endeavour to become more environmentally aware, promoting an ECO friendly attitude throughout the hotel, Le Méridien Al Aqah believes in recycling water from the gardens and has a number of power saving initiatives in place. With the help of local authorities, they are currently in the process of identifying a location within the vicinity for beautification and maintenance, highlighting that Le Méridien Al Aqah is not only concerned with pleasing guests but preserving the scenery and wildlife of Fujairah also.
With more than 60% of Le Méridien Al Aqah’s guests coming from abroad during the peak months of November – April, the resort uses WTM as a platform to boost its visibility with the travel industry as well as directly with potential guests.
Fujairah and the East Coast of the UAE have grown in popularity since Al Aqah opened its doors five years ago, with the resort realizing maximum occupancy rates almost year-round.
About Le Méridien
Le Méridien brand, currently represented by approximately 120 properties in 52 countries, was acquired by Starwood Hotels & Resorts Worldwide in November 2005. With close to 70 percent of its properties located in Europe, Asia-Pacific, Africa and the Middle East, Le Méridien provides a strong international complement to Starwood’s primarily North American holdings. Plans call for dynamic expansion of Le Méridien-branded hotels within the next five years, concentrating in the U.S., Latin America, and Asia-Pacific, including destinations such as India, Thailand and China. For more information, please visit www.lemeridien.com
About Starwood Hotels & Resorts
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 890 properties in more than 100 countries and 145,000 employees at its owned and managed properties. Starwood® Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis®, The Luxury Collection®, W®, Westin®, Le Méridien®, Sheraton®, Four Points® by Sheraton, Aloft(SM), and Element(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.