Air Arabia, the largest low cost carrier from the Gulf is different from its peers from Gulf. Unlike Emirates and Etihad, Air Arabia does not carry much onward traffic (about 80% is point to point) and carries little labour traffic, airline chief executive officer Adel Ali says in an interview. Ali says operating costs to India are 40% higher and the airline has no immediate investment plans in India. Excerpts.
Q) How do you see the Indian market after the government allowed foreign airlines to invest in India?
A) Indian market has not changed. It has grown and it continues to grow. It has always been a good market considering its size and population, and the positive trend of its economy relative to rest of the world....i do not think its gloom and doom
Q) How much does Indian market contribute to Air Arabia's passenger and revenue?
A) Ten to twelve percentage.
Q) What has been growth in Indian market?
A) There has been a growth year on year till 2008. For the last two years we have not be able to grow. We have utilised all our capacity under the bilaterals. Our seat factors are high but until such a time we are granted additional capacity there will be any growth
Q) And the costs of operating to India
A) Operating costs to India are high. The fuel costs are high...airport charges are high...quite a lot of additional charges airlines have to pay. You (airlines) pay atleast 40% more to operate to India than else where.
Q) How much fifth-sixth freedom traffic (onward traffic) does Air Arabia carry?
A) Eighty% of our business is point-to-point (third and 4th freedom traffic). Our business policy does not encourage fifth and sixth freedom traffic. We are not Emirates or Etihad. We operate to thirteen cities in India. We have followed a similar strategy in Russia and CIS and in the last sixteen months we have started operating to 14 airports in those countries. In the last six months we have opened six new routes. All of these are point to point connections When we started flying to India in 2004-05 there were only 4-5 international airports and all of them were packed. We were the only ones to go to Nagpur and most of people questioned the decision wondering whether we could get passengers. But we are still flying from there.
Q) Air Arabia runs subsidiary airlines in Egypt and Morocco. Is Air Arabia interest to invest in Indian carriers?
A) We have not made any move, any thought or any decision about investing in India. Until about few years back the law did not allow foreign airlines to invest. Now that law has been changed and one needs to look at the framework of that law and needs to understand what exactly does it offer..what are the implications and benefits. We are extremely busy expanding our airline. We are short of planes..We have 36 planes due for delivery in next three years. We need them for Egypt, Morocco and Sharjah. We are not going to rush to buy or invest in a place in which we are not experts. Operating from India-Sharjah is one market but setting up business in India..we are not experts (in that)..Of course if there is a good business opportunity I am sure we and other airlines will look at it.
Q) What is Air Arabia's traffic mix in terms of labour or business traffic. Are you worried about the competition with Indian airlines on Gulf routes
A) We carry very little labour. Our business segment is in simple way all the people who pay themselves for their tickets and labour does not pay itself. But we will be happy to carry labour traffic We carry everybody..mainly families and small businessmen and lot of VFR (visiting friends and relatives) traffic. We have 16,000 seats/week to India and I assume on reciprocity basis all Indian carriers will have similar number (seats to Sharjah). If you just take the number of Indians that live in Sharjah we do not have enough capacity for them. We need to put things in perspective. Whether IndiGo comes or Spicejet comes...They will only take some of pressure that exists in the market.
