RAK Int'l Airport's low cost ambitions

By Shayan Shakeel 13 February 2017
RAK Int'l Airport's low cost ambitions Mohammed Qazi, RAK Airport's CEO

Less than three months after Mohammed Qazi took the helm of Ras Al Khaimah International Airport, its flag carrier suspended flights, with no future take-off in sight.

RAK Airways had been carrying 400,000 passengers annually and had driven the airport’s traffic up 69 percent in the preceding months. When it collapsed on December 31, 2013, Ras Al Khaimah (RAK) airport was left with barely a listing on its arrivals screen.

It could have been the end of the tiny airport. Instead, the British aviation veteran has led a stunning turnaround, recording the airport’s best year ever in 2016.

Without a flag carrier, RAK airport has been luring airlines from around the region by offering an alternative to the congested Dubai International Airport, easy access to the Northern Emirates and faster turnaround times for aircraft and passengers.

Within months of the fall of RAK Airways, Qazi secured Sharjah-based Air Arabia, the UAE’s only listed airline, to set up a hub in RAK. It now flies from the emirate to ten destinations as vast as Bangladesh, India and Nepal. Frequencies doubled in the past year to more 50 flights per week.

The addition of Qatar Airways and Air India Express in the first quarter of 2016 saw passenger numbers at RAK airport grow 52 percent last year. Cargo operations also increased with new business from Egypt Air. The airport has also targeted charter flights to and from Russia and former Soviet states.

While three years ago, RAK airport was at risk of becoming a white elephant, it pushed ahead with the expansion of its arrivals terminal, increasing capacity by up to 40 percent. That is well above current volumes, creating plenty of room for more passenger growth. “It’s been a phenomenal year,” Qazi says.

But he efforts in the past three years are all the more phenomenal when you consider that the airport sits just over an hour away from the busiest airport in the world — Dubai International Airport — and barely 30 minutes away from the UAE’s oldest airport, in Sharjah. Including Abu Dhabi International and Al Maktoum International as well, RAK airport operates in one of the densest airport environments within a country anywhere in the world. In such a location, last year’s results spell a remarkable success story and vindication for Qazi’s plan to turn around RAK airport’s fortunes.

Rather than compete with the already well-founded hubs that serve tens of millions of passengers annually, Qazi has focussed on developing a niche for RAK by making it the leading low-cost airport in the region.

“We can’t all be hubs,” he says. “Our analysis says 45 percent of all growth over the next few years will be accounted for by narrow-body aircraft, which fly shorter routes and the majority of which are owned by low-cost carriers. So we’re developing our infrastructure to cater to that low-cost market.”

Qazi has worked at various airports in the UK and turned to that experience to draft his plan for RAK. He says each airport in the UK focusses on a function and the same can be done in the UAE. In London, for example, Heathrow Airport serves primarily commercial flights, while Gatwick Airport caters to business aircraft and London Stansted Airport focusses on cargo.

“In an industry that [airline association] IATA says has a growth rate outstripping capacity, and the fact that the UAE has a very congested airspace, we can operate as a very different kind of airport,” Qazi says.

Developing that low-cost infrastructure involves a tight cost evaluation process. RAK airport has no airway bridges, for instance, meaning passengers disembark and walk to the terminal. It might seem like a bare bones cost-reduction strategy, but it also drastically reduces passenger turnaround.

“You could be in and out of the airport within the hour,” he says. That fact also decreases the landing-to-flight time for aircraft, a proposition that led to Qatar Airways deciding to touch down at the airport.

“Keeping costs to a minimum allows us to offer rates to aircraft lower than those offered by other airports in the region, and decrease their ground time so they can [turn around] faster and make more revenue,” Qazi says.

That is not to say RAK is not investing in technology to streamline operations. “We’re about to unveil a faster check-out process so passengers can leave the airport even faster, adding to our value proposition,” Qazi says.

The airport has already invested in e-gate technology similar to the one employed at Dubai International, which allows passengers to clear immigration “in under five seconds”, Qazi claims.

A background in finance makes numbers second nature to Qazi who prefers to be frugal rather than indulge in grand plans.

“What we look for are investments that provide a return within two to three years,” Qazi says. “It has to make business sense and has to attract passengers. But we’re also owned by shareholders, and shareholders want a return on their investment.”

A major draw for RAK has been its proximity to the Northern Emirates. With Dubai gradually shifting its major airport from the north of the city to the south, Qazi is hopeful RAK will become even more appealing for travellers.

“That Dubai is pushing for Al Maktoum International’s success helps us by giving us more space to be a gateway to the Northern Emirates,” he says.

RAK offers an entry point for flights seeking to capture the tourism potential in Fujairah, Dibba and Ras Al Khaimah itself, a focus the airport is working towards earnestly with the RAK Tourism and Development Authority. RAK tourism has increased to over 1 million guests last year and the authority has been active in creating new tourism drawcards, while several luxury international hotels and resorts have opened along the emirate’s shores.

“The tourism authority is bigger here [than in other Northern Emirates]; we’re more established on the passenger side to cater to the Northern Emirates,” Qazi says.

While the emirate will become increasingly popular as travel becomes more convenient, Qazi says what could really help RAK boom is increased intra-country and intra-GCC travel.

“There is a lot of traffic on the roads between the Emirates, some of which could be converted via an airlink,” he suggests.

RAK Airways unsuccessfully attempted to create a market for domestic air travel; its flights to Abu Dhabi was launched in October 2012 but were soon cancelled due to a lack of bookings.

Qazi says there needs to be a better value proposition to entice customers. “There might need to be a different mode of transportation, maybe helicopters,” he says.

He is calling on regulators to help facilitate the domestic market, suggesting there needs to be increased cooperation between aviation authorities in each emirate. Smaller airports also should have customised restrictions to support their growth, he says.

“Part of a regulator’s remit is to promote airports, but as a smaller airport, I’m very limited in what I can do. Smaller airports could add to traffic and tourism a lot more were they to have different restrictions and more flexibility,” he says.

Giving smaller airports such as RAK flying rights to major GCC cities also would help tap new markets, he says. While he sees potential for flights between RAK and UAE neighbours Qatar, Saudi Arabia and Oman, as well as short-haul destinations from those countries, it cannot be fulfilled because of a lack of flying rights.

For example, the emirate does not have rights to allow airlines to fly from its airport to Riyadh, a capital with an estimated 6 million residents.

“All those rights are currently exhausted by the bigger airports,” Qazi says. “But we have a business case as well and those rights shouldn’t be reserved just for bigger airports and the bigger civil aviation authorities.”

Qazi points to an agreement made with Air India Express in 2016 that allows it to operate flights out of Calicut in India to airports in both RAK and Al Ain.

“That agreement came out of the understanding that the airports in both cities were smaller and needed more flexible routes to attract the airlines,” he says.

However, with aviation authorities in each country and city determining routes to be opened, if any, the regulatory bureaucracy is making agreements such as the one with Air India Express serve as the exception rather than the rule, says Qazi.

“We can’t make any kind of point to point traffic agreement ourselves, we have to go through the Civil Aviation Authority in Ras al Khaimah, GACA in Saudi Arabia, DGCAA in India, CAA in Pakistan, and others, all of whom should be working to relax restrictions on smaller airports themselves,” he says.

“We have people that are willing to travel, but unless we have more flexibility we can’t offer them any options. It’s only the regulators that can make that decision,” he says.

Despite his reservations against the regional regulatory arrangement, Qazi is optimistic about the future and expects RAK to attract more airlines and passengers to its cause.

“The UAE’s GCAA has been very flexible and approachable,” he says. “With our value proposition, we’re proving to be an extraordinary growth story in the region.”

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