Low-cost Middle East

easyjettailfinExpect a price war on flights to the Middle East this winter. On 2nd November, easyJet launches a new route from Luton to Tel Aviv, joining a host of airlines including BA, bmi, El Al, Thomson and jet2 flying between the UK and Israel.

More significantly, the highly successful UAE-based low-cost carrier Air Arabia has announced that by the end of 2009 it will be launching a new airline, Air Arabia Egypt, to link several Egyptian airports with destinations in the Gulf, North Africa, Europe and the UK.

The Israel example shows the power of what the airline industry calls VFR – ‘visiting friends and relatives’. Despite the political problems, tourism to Israel has always remained buoyant, fed by special-interest religious tours in particular – but fuelled above all by VFR, especially from areas with a high Jewish population. In the UK that means, firstly, north London: even before easyJet’s launch, El Al is the only full-service national flag carrier able to maintain regular near-daily scheduled service out of Luton (and, previously, out of Stansted), in addition to its twice-daily Heathrow service. Another key VFR origin is Manchester, from where jet2 launched nonstop Tel Aviv flights in January 2009 – shortly afterwards announcing that it was doubling its peak service.

VFR out of the UK to most other Middle Eastern destinations isn’t as strong – there just aren’t that many expat Jordanians and Syrians in Britain. Air Arabia, though, has already proved that VFR works: in April 2009 it launched Air Arabia Maroc, a low-cost carrier which today links Casablanca with a clutch of francophone cities in western Europe (alongside London, Milan and elsewhere).

Its new venture, Air Arabia Egypt, on the other hand, is squarely targeting the leisure market, with multiple bases in Egypt serving different markets: Cairo and Alexandria will no doubt benefit from expanded links to Africa and the Gulf (where the large numbers of Egyptian expats brings VFR into play again), while Luxor, Sharm El-Sheikh and Hurghada will likely attract service chiefly from northern and western Europe. The three Air Arabias will also, no doubt, link up, making it possible to fly in a series of hops from the Atlantic to the Bay of Bengal, low-cost all the way.

Ryanair CEO Michael O'Leary

Ryanair CEO Michael O’Leary

The new venture also kick-starts a fascinating contest. easyJet, a pioneer of low-cost travel in Europe, already serves Egyptian holiday airports such as Sharm and Hurghada from the UK. It will, it seems, soon have to compete with Air Arabia, a pioneer of low-cost travel in the Middle East. Two highly successful carriers from different parts of the globe are about to meet head-to-head. Be sure that Ryanair will be watching closely.

Beside all of this, the Gulf (although aided by market protection) is able to support six more low-cost carriers – Sama, Nas, Felix, Bahrain Air, FlyDubai and Jazeera. The last of these has announced that it is searching for a new regional hub. Will it be Beirut? Istanbul? Perhaps Athens?

As Middle East airlines start reaching out towards Europe, expect an ever-intensifying clash of low-cost cultures in the months ahead.

4 Comments

  1. David Whitley

    Very interesting. For selfish reasons, I love it when a new destination comes on the low-cost radar. I’ve not been to Egypt so far as all the cheap flights go to Sharm/ Hurghada/ Marsa Alam – but if they started to Luxor or Cairo, I’d be on it like a shot.

    It’s interesting to see how popular a destination can become once the cheap flights (from Europe) start there. It was Morocco a few years ago, Ukraine and Israel are the newest. If it spreads to the Middle East, tourism there could change immensely.

    1. Matthew Teller

      Thanks, David. You’re spot on. Unfortunately, there are 3 things standing in the way of low-cost expansion from Europe to the Middle East. First is distance: 737s are about at their limit flying for five hours (the flight time from the UK to the eastern Med/Red Sea). Second, in Jordan, Syria, Lebanon (the places that would benefit most from low-cost expansion) you’re dealing with airports that are either publicly run or very recently privatized: nimble, far-sighted decisions to attract new business do not come naturally. Third, the European low-cost carriers aren’t shy about demanding immense payments to launch new routes: these countries do not have buoyant enough tourism sectors to justify huge payouts upfront… though if they could manage it, I agree it would boost tourism more than just about anything else. Chicken and egg.

      1. Ahmad Humeid

        I want cheap flights from Amman to Frankfurt or Berlin! Arrrgh!

        Anyway, I think I will try FlyDubai from Amman to Dubai soon.

  2. Matthew Teller

    Thanks Ahmad. You might get them yet – nobody knows (yet) where Jazeera Airways will choose for their new hub… it could be QAIA! (Makes a lot of sense in the low-cost model, IMHO). You’re not the first person to have mentioned that Jordan was noticeably lacking from this post… I could write a whole sob-story about the shocking waste of an outstanding resource that is KHIA in Aqaba. In fact, I feel another post coming on…

    When you’ve taken that FlyDubai flight, come back here and let us know what you thought.

    Meantime have you tried airberlin.com – they have regular low-cost flights from Sharm ash-Shaykh (and Tel Aviv, though I’m guessing you’d prefer Sharm) to Berlin and around 15 other cities in Germany…

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