Saudias Flyadeal Eyes International Expansion

Low-cost Saudi airline Flyadeal, sister to flag carrier Saudia, plans to launch a concerted effort to expand its international presence beyond Dubai before the end of the year, as its fleet size grows to 19 Airbus A320/A320neos.

Launched in 2017 and initially swamped with domestic demand, the airline's challenges included a reversal in plans to take delivery of 30 Boeing 737 Maxes following the model's grounding and, finally, Covid-19. Today, CEO Con Korfiatis calls the delayed launch of an array of international destinations a blessing in disguise. 

“We thought we would fly internationally earlier than we have, but found that when we were taking deliveries, the market was just yelling for the capacity to be deployed domestically,” he said. Launching Dubai as its only out-of-country route to date on July 1, Flyadeal saw that destination suspended four days later due to the pandemic, and not reactivated until September 16. In addition to Dubai, Flyadeal now operates 18 domestic routes among 13 destinations.

“We would have said that the domestic market would have returned to 2019 levels before the end of 2021, but the Delta variant came along and that's probably pushed back the dial—to what exactly we don't know," said Korfiatis.  

Since its inception, the airline has taken delivery of 11 A320ceos, all leased as new. Another three A320neos came from a 65-aircraft order placed by parent company Saudia during the 2019 Paris Airshow, including 30 of the baseline Neos for Flyadeal. Saudia still holds options on another 50 Neos. “Ideally we'd like to exercise those options," said Korfiatis. "If you put them into the equation, that's 50 for us and 50 for Saudia. The first of our 30 deliveries were these three A320neos, so we've got 27 still to go. We've got [four] coming late this year and quite a big number next year. Then it continues out to 2025.”

Saudia’s order for 20 A321neos and 15 A321XLRs remains destined for the flag carrier, Korfiatis said. “Could Flyadeal be interested in A321 aircraft in general, going forward?” he asked. “Yes, judging by our domestic load factors on the thick routes. We could certainly fill a larger aircraft. The A321 with some kind of extended-range operation, whether it's an XLR or an LR...could be interesting for us, as we branch out further away from Saudi internationally over time.”

Load factors have exceeded 80 percent since Flyadeal's inception. “We don't publish exact numbers, but we've always flown very high load factors. Even in a domestic context on the existing network, on a number of sectors, we could fill an A321 quite comfortably."

Korfiatis sees the international network growing concentrically. “The early new routes would be closer to home, perhaps. Over time, we will go further away.”

“We've just a couple of direct flights to Dubai; we're far from having much of an international network yet. We look forward to building that also, and having a pretty extensive international footprint. We're hopeful of having at least one, possibly two, more international destinations before the end of this year.”

India, Egypt, and Europe all stand as possibilities, but Korfiatis was reticent for commercial reasons. “We've had a 10-year look at what the organization and network might look like, and all those places feature and are accessible with the A320neo. A321 variants [would] provide even longer rides, but even with the A320s, we can touch all of those places."

To emulate Kuwait's Jazeera Airways, London Heathrow also appeals to Korfiatis. Flyadeal uses a 186-seat configuration, the densest on the A320 in the Middle East.

“I think it's just a little bit of a stretch for the 320neo from here,” he said. “We got very close to it, but not quite; maybe with some load constraints we can get there. It's a matter of whether that then becomes commercial. If we take a 321LR, for example, then the UK is very squarely in place.”

Despite the slow path to recertification around the world, Korfiatis does not rule out revisiting an order for the Boeing 737 Max in the second half of the decade. 

“Obviously, the Max order is really unfortunate," he said. That was far from ideal. The fact that it partly slowed us down—and Covid slowed us down a lot more in some ways—turned into a saving grace, because had we a much larger fleet dedicated to international [service], surviving the Covid times would have been far more difficult than it has been."

Source : https://www.ainonline.com/aviation-news/air-transport/2021-10-04/saudias-flyadeal-eyes-international-expansion

758