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Budget Flydubai sets flight path to profits

Budget airline Flydubai is competing with major airlines, such as the Emirates flight shown, at Dubai International airport.


Early on a Sunday morning at Dubai International Airport, well-dressed businessmen are forming an orderly queue at a check-in desk.

They are not the frequent fliers of Emirates or Qatar Airways, but Flydubai, the emirate's fast-growing budget airline.

Quietly, and with little fanfare, Flydubai is sneaking up behind its more expensive rivals, targeting short-haul business commuter routes between Dubai and cities such as Doha and Kuwait City. In a period of austerity, it is hard to argue why businesses should pay double the price for a one-hour flight.

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"A lot of people who do business in the region, reside and set up their businesses here," says Ghaith al-Ghaith, chief executive of Flydubai. "They need more frequent flights at different times of day, so they can get their businesses done in the same day, that's one of the areas we have focused on."

Established in 2008, the government-owned airline started operations in June 2009, just months before Dubai's debt crisis roiled emerging markets across the globe. Despite its untimely launch, Flydubai managed to draw one million passengers in its first 13 months of operation.

"It was not easy, it was tough, but we always believed in the end results," Mr. Ghaith says of the lows of the crisis. "We also believed that the infrastructure that Dubai was going for was going to come and pay off eventually."

Having survived the toughest period of Dubai's recent economic history, Flydubai is expanding its routes and growing into a local household name. Business travellers frequent its eight daily flights to Doha, six to Kuwait City and four to Muscat.

In 2011 the airline launched 18 new routes, expanding into Central and eastern Europe. So far this year, the airline has launched flights to Baghdad and Najaf in Iraq, Taif in Saudi Arabia and the Kyrgyz Republic.

Another trick handy for business customers is seat selection, opportune for the dash to the visa queue at the destination airport. Passengers can pay from as little as 5 Emirate dirhams ($1.36) to choose their seats. For a little more, they can chose the front row, and be first off the aircraft.

With 22 aircraft in operation, it is still much smaller than the "super-connector" Gulf airlines – Emirates, Etihad and Qatar Airways – that are reshaping the global aviation industry. But since ordering 50 new aircraft in a $4-billion aircraft deal at the Farnborough air show in 2008, Flydubai's vision for expansion is clear.

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Despite the apparent success, it remains part of a crowded market. The government-owned airline does not disclose its financial results, and it is hard to gauge just how well the carrier is doing.

As a low-cost Gulf airline, it competes with companies such as Air Arabia, based in the neighbouring emirate of Sharjah, and Kuwait's Jazeera airways. Air Arabia saw a 12-per-cent decline in profit last year, while Jazeera returned to profit after a 2010 loss, according to data provider Zawya. While typically more expensive, the region's flag-carrier airlines are also competition.

Mr. Ghaith says that the company will turn its first profit this year, three years after it started operating.

Thanks to an affluent domestic market, the airline is also seeing success with short-haul flights to holiday destinations such as Colombo and Kathmandu, a popular haunt among the UAE's expatriate community.

The defence and diplomatic world are also embracing the Kabul flight, and direct routes to Iraq.

But as with other low-cost airlines, affordability comes at a price. In the case of Flydubai, that would be its base at Dubai International Airport's Terminal 2, the low-cost, and much less glamorous, sibling of Emirates Airline's sparkling and cavernous home base at Terminal 3.

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As the business travellers jostle for the limited seats at a lonely Costa Coffee, they remain nostalgic for their treats at the luxury lounges just a stone's throw away.

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