Volume # 10 | October, 2013

UAE Freezones Biz News Updates

Pakistani businessman launches UAE’s first private commercial airline

UAE’s first private sector airline allowed by the UAE government was launched by a 26-year-old Pakistani businessman Malek Naureed Awan who hails from Abbottabad.

The upcoming airline i.e. MMA Airline has been registered with the Ras Al Khaimah Free Zone, from where it received airline licence as a company last month.

This will be the first private commercial airline to operate from the UAE. It may be mentioned that UAE already has five state-owned airlines owned by the governments of Abu Dhabi, Dubai, Sharjah and Ras Al Khaimah. The country has, so far, not allowed any private airline to operate scheduled commercial flights.

However, a number of private companies operate freighters and charter flights, including business jet operations such as Royal Jet, ExecuJet and EliteJet. An air operator’s certificate (AOC) is an approval granted by a national aviation authority to an aircraft operator to allow it to use aircraft for commercial purposes. This requires the operator to have personnel, assets and systems in place to ensure the safety of its employees and the general public.

According to detail, Awan’s company is investing $50 million (Dh183 million) in the start-up, which will be based in Ras Al Khaimah. The total investment is coming from company’s own resources.

Awan plans to launch flights from Ras Al Khaimah International Airport to Karachi and Lahore initially and then add destinations in India and other countries when it secures traffic rights.

The newly launched airline has already acquired two Airbus A320s to start flights. Two Boeing 777-300s are expected to join the fleet when we plan to add more destinations, such as Mumbai after traffic rights are granted.

Pakistani-backed carrier is looking to share traffic from cost-conscious Pakistani nationals living and working in the UAE, albeit away from the congestion and high competition seen in Abu Dhabi and Dubai.

With two A320s to start operations, it’s not clear whether the company has the finance, or another avenue, to source more jets as they plan to expand operations.

The airline is being launched at a time when western airlines are struggling to survive while regional carriers are recording strong growth. Emirates and Air Arabia are making increased profits and Etihad has just become profitable.

International Air Transport Association (IATA) this week announced a downgrade to its industry outlook for 2012 primarily due to rising oil prices.

IATA expects airlines to turn a global profit of $3 billion in 2012 for a 0.5 per cent margin. The $500 million downgrade from the December forecast is primarily driven by a rise in the expected average price of oil to $115 per barrel, up from the previously forecast $99.

The risk of a worsening Eurozone crisis has been replaced by an equally toxic risk — rising oil prices. Already the damage is being felt with a downgrade in industry profits to $3 billion,’’ said IATA.

For MMA Airline, the challenge will be to attract passengers from Dubai, Sharjah and other neighbouring emirates — home to a large number of South Asian expatriates.

The new airline is going to offer free bus shuttle services to its passengers from Dubai and Sharjah.

September 14, 2013

Free Zones Of UAE

Volume # 10 | October, 2013

UAE Freezones Biz News Updates

Courtesy HURMAT GROUP

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