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SAUDI ARABIA Achat Lamloum: “it doesn't ‘make sense for one route, ‘Jeddal-Riyadh-Jeddah, have aroun 30 igh day” esma Airlines boss Ashraf Lamloum tells Martin Rivers the company is adapting and finding new opportunities in its home markets of Egypt and Saudi Arabia. NEW DOORS OPEN AS THE JEDDAH DOOR CLOSES = A320 faye cdi froqencesndeconomisof le eeded beat nemibonts Tite semen ciy paore ha 30 ines titenwih vide body me Thesubsequent uf Fadl, Sait’s ow cost subsidy ony made tings woneby pushing upcapecy and Shoane duran Tras heres no gest suprie when Nesta KSA qi shut dosnt ddhfusein Ocoberreeatng fem hark tha Lamicumnow deserbesasa money br Tu thecompamy isnostangrto reinventing iceland inanagement aca have tn finger in oral ther es rowing pial stats Ca hassecna return the European harterfighsthat Nesta Ep asi erie and thcopimloperstoret the band fintceved when Taunchdin 3010 hestheldighs a he yp Saud County pialsorenatn ati alt hth Feducd frequencies, And Nesna KSA sil run Ge onesicnciworkiromhenortemeiyetisi, (SMH 33 NRG aes ‘CONTIMEDFROMPAGE 33 Jet operations from Jeddah had, in truth, been something of anafterthought, The Saudi licence ‘was orginally granted fo the Ha'll base, which dloploys four ATR 72-600 turboprops and bbenofis from government subsidies because of poor connectivity in the region, By contrast, lights from Jeddah were being ‘operated ona commercial basis with wetleased ‘$3205 and A321s-— inital from Small Planet Airlines. then from Jetstar Pacific. nd finally from Nesma Egypt “The Ha'ilhubisthe min projet that we butte [Saudi company on," Lamloum alfirmed, “We are out of the market from feddah because ofthe competitors. Flyadeal, SaudiGul, plus the increased frequencies of Nas and Saudi ‘Airlines It was useless o remain fighting there. doesn’t make sense for one route, eda idh-Jedda, to have around 30 fights a doy How tocompete? How [when you have] round tep tickets [costing] around 500 ryal($80)?" Profitability isno easier tofind in Ha’ but the company’s subsidy contract eases the pressure while Lamloum focuses on building brand awareness and network eliciences “The Saudi Government is supportingour lossesforawhile” he confirmed, “Hopefully ‘with time twill make money. Stil, we are promoting the routes with very low ticket rates, Andstil the load factor isnot stable all year round.” ‘Asof December, the Halil hub had spokes to 10 destinations in the northem half ofthe kingdom: Ara, Al Jew, Quisumah, Qassim, ‘Qurayyat, Ratha, Tabuk, Turf, Al Ula and, Mec Maximum operation "That represents the “maximum operation we can achieve" inthe city at present, though talksare under way with the General Authority of Civ Aviation (GACA), Saudi Arabia's aviation regulator about basing turboprops at another domestic airport. The second hub could open as soon as thisyearfan agreements reached, but [Lamoum would not be drain on its ecation, “The pictureat Nesma Egypt is more complicated, owing tis oscillation between charterand scheduled fying Having started life asa charter operator linking the Red Sea and Nile Valley resorts with Europe, Nesma Egypt was thrown into turmoil byasuecession of political and security rises in itshome county. ‘An Arab Spring revolution. a the creation ofa Daesh fate i resultant bombing of Metrojet Flight 9268, sent Egypt's tourism sector into frefall between, 201 and 2016, Te afin responded by 100% ofits operation. By 2017, however, te situation was calm «enough for charter servies to resume. Nesma M4 eam SAUDI ARABIA ‘Help toy: Nesma deploys fur ATR 72-600, ‘acboprops om the Hail base and ‘tom government subsidies. 8 Egypt now operatesad hoe fights to countries such as Spain, Germany. aly, Hungary Slovakia, Slovenia, Czechia and Armenia. “There i no exclusive contract with any tour ‘operator. Weare open and ready to contract with the best options we may have,” Lamloum sti. “Now weare increasing slightly our charter ‘operation compared to sehedaled [Mying) .. We are planing te have around 60-65% of our ‘operation es chart” ‘Theaitline also ran flights between Riyadh and Sarajevoon behalf of FyBosnia las though that partnership ended when the Bosnian star-up secured its own icra ‘On the scheduled side, Nesna Egyptcurrently fies from Cairo to seven points in Saudi Arabia: Hi'l, Al jaw, eddah, Qassim, Tabuk, Taifand Yanbu. Applications forthe right toalso serve Mevtina and Dammam had not yet been approved by regulators as Arabian Aerospace was going to pres. Lamloum has clear wish ist for regional ‘expansion -Kuwait: Dubai AI Maktoum ‘Airport Khartoum in Sudan; Baghdad, Basra ‘and perhaps one Kurdish city in frag ~ but there isnofirm timeline for the programme. “Weare ina very unstable period,"he said, noting ‘aggressive discounting by other Egyptian carriers “Sowe prefer to keep the well-known markets with the wellknown revenue, before investing and injecting more fornew markets.” Two A320s and one A319 are currently based in Cairo, fllowing the withdrawal of fourth aircraft last autumn, Beth A520s will be teplaced with younger models when their leases expire this year, ‘Though there areno plans to add more narrow-bodies, Nesta Egyptcouk! beon the verge of becominga wide-body wet lease provider. “We are seriously considering right now aaddingat least wo Airbus 350s to our Egyptian air operators certificate (AOC).” Lamloum said, expressing hope thatthe aircraft will arrive between june and September this year. “We will wet lease them to our Saud company because there is huge demand there skmost all year round for Hajand Umrah operations." “The wide- bodies, which will be 2006-build or newer, wll be deployed tothe Far East and west, ia, including Indonesia, Bangladesh, the Philipines and Senegal, Religious traffic isa major source of revenue for airinesin Saudi Arabia, with an estimated 8.5 million foreign pilris visting the kingdom in 2017 forthe Hajar Umea, Nesmsa KSA previously dipped its toes into the market by wet leasinga Boeing 777-200ER from Malay FlyGlobal for charter flights from Kuala Lumpur. ‘Sub-contracting it sister carrier should make the services more profitable, particularly given Egypt's low eost-hase for maintenance and ‘operations. Weelease customers LLamloumalsodid not rule out the possibility of Finding other wetlease customers [Notwithstanding the move into wide-body ‘operations, Nesma Egyprsappetitefor growth has waned in recent years Plans for aseven- strong flee in Calo were abandoned almost as soon as they were announced in 2016. ‘The slowdown may appear at odds with Egypt's recovering tourism figutes But essons from the over heated Saudi market or telling Lamloum to keep watchful eye on capacity hikes by rivals such as Air Arabia Egypt and FlyEgy He believes some competitors are offering “purely unrealistic” fares that will grow their market share inthe short-term while cerdangering theirlong-term survival “We cannot go through the price wa that ‘others are following,” the chief executive insisted “Nesma has avery high standard and name regarding quality and safety Therefore, we have minimum prices we are offering and we are not ‘going dawn below those prices, Itour operators would ike to sleep at night without being worried, then they are coming to usand accepting ltl bit higher price than the others.” . 34