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.
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‘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.” .
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