Tuesday, March 27, 2012

Article on Eastern Express during the Dubai Airshow 2011

An article on Eastern Express that appeared in the local press Alrroya during the Dubai Airshow 2011. There was even a nice picture of me that made me look 10 years younger but I seem to be unmable to copy/paste it into the blog!

New UAE airline to fly out of Fujairah in Q1 2012
Tuesday, 15 November 2011 at 16:45, By Criselda E. Diala, Dubai

Despite a relatively challenging business climate, a new private carrier is expected to debut in the UAE skies early next year to serve the untapped travel and tourism market of Fujairah, a company
executive announced on Tuesday.

High fuel prices have undoubtedly taken a big chunk out of airlines’ profits and uncertain economic
conditions continue to dampen travel trends, but Alex de Vos, Chief Executive Officer of Eastern
Express, is confident their business model has the potential to drive passenger traffic growth in and out of their hub.

“I agree it’s not the best of situations, but to be honest, we probably entered at the right time. We can
get aircraft at reasonably low cost and utilise airports at lower cost. Obviously the fuel price would
affect us as well. But then again, the Turboprop aircraft that we are going to fly are purpose built for
short routes and uses just about a third of the fuel consumed by a smaller jet,” De Vos said.

The company has not set a specific date for their maiden flight next year, but the Eastern Express CEO said they are expecting their first aircraft to be delivered towards the end of 2011. The airline will initially fly using one aircraft twice daily between Fujairah and Abu Dhabi, adopting a feeder or
“commuter carrier” concept.

As it does not prove economical for larger airlines to fly to smaller hubs, commuter airlines exist to fill the gap. According to De Vos, the business model is used in various regions worldwide, but has not yet been adopted in the Middle East.

The feeder carrier concept basically involves a “purpose-built regional aircraft” collecting passengers
from a destination not served by major airlines to larger hubs for onward journeys on board national or international carriers.

“That is basically a win-win situation for everybody because in the end, the [bigger] carrier gets more
passengers and exposure to larger audience [while] the passengers in smaller hubs have now the option of choosing between a car and an aircraft [when going to the larger airport],” he explained.

De Vos also disclosed that Eastern Express is also in talks with at least three carriers – one from the
UAE and two from GCC countries – for possible partnership. At the moment, however, no formal
partnership agreement has been signed by the airline with any party.

Not a national carrier

Asked whether the Fujairah government has any stake in the airline, De Vos said not in the financial
sense. Eastern Express will operate as a private carrier and not as a UAE national airline such as
Dubai’s Emirates and flydubai, Abu Dhabi’s Etihad Airways and Sharjah’s Air Arabia.

“We’ve obviously got tremendous support from the Fujairah airport and the government, but we’re a
privately funded airline, not state funded. We are not going to be the Fujairah national carrier,” De Vos emphasised.

The Eastern Express top executive also discounted the possibility of feeding passengers through Dubai, which is closer to the northern emirate of Fujairah. “By road it will take you about 90 minutes from airport to airport and that’s already a very short timeframe. The added value for passengers to step on Fujairah and fly to Dubai [and then] fly somewhere else, is probably not as gaining as it will be with Abu Dhabi or other destinations,” he said.

Likewise, the completion of the reportedly Dh1.5-billion ($480 million) 80-kilometre Sheikh Khalifa bin Zayed Highway that will connect Dubai and the rest of the northern emirates will significantly reduce the travel time by road to and from these destinations.

Taking a conservative approach

Considering the current market conditions, De Vos was quick not to sugarcoat their market outlook and instead reiterate their cautious stance in delivering their operations. “We have put a very conservative model in place just to be sure basically. I believe for the first year [of our operations], we calculated around 5,000 passengers that we can transport, which is nothing really so anybody that is willing to fly with us and increase the number beyond 5,000 will probably get a very good deal with us,” he said.

Eastern Express’ entry into the UAE aviation market is expected to help boost Fujairah’s tourism
potentials. According to the country’s General Civil Aviation Authority, air traffic movements at the
Fujairah International Airport was at 328 in August.

Air traffic movement in the UAE in general has been growing steadily with August witnessing a 4.8 per cent increase from July, buoyed mainly by strong figures from Dubai International Airport.

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