Flyadeal's CCO confident in sustainability of Middle East's LCC market

Sudeep Ghai's flyadeal has grown so quickly in the domestic market since launching three years ago that it has been able to hold off from starting international routes so far

As arguably the leading domestic budget airline in Saudi Arabia, flyadeal has quickly made a name for itself in the region after only launching in 2017. Sudeep Ghai, chief customer and commercial officer at the airline, explains how the business is being impacted by the changes going on in the Kingdom and how it is adapting to them.

How has the new tourist visa system shifted the Saudi Arabian aviation market and its fortunes?

In the first 33 days since they were launched, some 77,000 tourist visas were issued and that represents enormous potential. It is difficult for us at flyadeal to see any direct link between the visas and flights because our flying is 100% domestic and we would only see this as travel within the Kingdom. That being said, this has to be seen in the much larger context of the Vision 2030 project and a wave of changes that are pro-travel. Consider a few examples: plans to dramatically increase year-round Umrah pilgrim traffic, the fact that women can now travel without their guardians, a nation-building project centred on promoting tourism and entertainment and the several domestic tourism seasons that were launched last year.   

Most people agree that the Saudi market is booming. But how long will it last?

I would say the boom has only just begun and any softening of the global economy is unlikely to affect this over the next 10 years. Think of this as the state-led development of Dubai over the last 30 years compressed into 10 years in Saudi Arabia. Why? The inbound tourism market has never really existed and the beauty of the country – Red Sea diving, wonderful historic sites, a relatively untouched landscape – is only just being unveiled. There are huge projects underway that will drive inward business traffic, for example the NEOM zone is a mega-project focused on advanced industries and technology, with robots being used for services and power being generated solely from wind and solar energy. The Vision 2030 ambition is to grow Umrah traffic to 30 million pilgrims by 2030, some three times the levels of today, which is more than most airports have in the region today. And if the Saudi population of just over 30 million people averaged six trips per capita as in other developed markets worldwide we would have an outbound market of 180 million. It is hard to see anything but upside in Saudi Arabia for the near term.

More Saudis are now booking their domestic flights on smartphones. How important has it proved for flyadeal to invest in this trend?

We do our best to be mobile and digital first. We have to be. We have 95% of our customers coming through online channels and 60% of the total come through mobile devices. We are designed for our customer – largely 26-40 years of age, tech savvy and price conscious – in a market where 80% of the population is less than 40 and has at least two phones. This is a country that is ripe for technological innovation and ecommerce.

What is behind flyadeal’s recent recruitment drive? How difficult – or easy – has it been to get hold of the necessary pilots and cabin crew?

While proudly Saudi and the majority of our team being Saudi nationals, we also boast more than 50 nationalities within flyadeal, a testament to both the airline’s and the Kingdom’s appeal.

Flyadeal only launched just over two years ago. Are its projections being met or even exceeded?

The performance of the airline has been ahead of expectations. We have grown faster than most start-up airlines and we have flown over six million passengers since we launched. It has been a measure of our success that our board has been prepared to back a new aircraft order less than 24 months after we started flying. I would also add that we had planned to commence international flying in the second quarter of 2018. The fact that we have not gone down that path demonstrates how strong the demand for the product has been within the Kingdom. In saying all this, we recognise the commitment of all our dedicated flyadeal team, especially our frontline teams in the cabin crew, pilots and airport staff, who are the face of flyadeal every day. They have done a fantastic job in bringing to life a working example of a low-cost carrier in Saudi Arabia. 

How will the new A320 neo’s transform flyadeal’s capabilities and the way it operates?

The neo aircraft will deliver a more fuel efficient performance and give us the range to open up new destinations. We also have the opportunity to look at other Airbus family aircraft and the A321XLR is a very interesting aircraft.

What are flyadeal’s plans for its next two years of business?

It is simple really: deepen our domestic network and cherry pick the international routes where we want to take the ‘everyday low fares’ promise to new customers.

Air Arabia Abu Dhabi launched recently as the region’s newest low-cost carrier. What do you feel the potential is for the low-cost carrier market in the Middle East? Some observers say it is becoming saturated considering the region’s relatively small population compared to Europe, for example.

I think that depends on your definition of the Middle East. The GCC is of modest scale but once you include the Levant and North Africa in the Greater Middle East the market is significant, some 400 million people, many of whom are price conscious customers that have not had access to low fare travel. If we are comparing to Europe, we’d have to take a look at the experience of the region to ask whether the Middle East has seen genuine examples of ‘pure’ low-cost airlines, not hybrid variants or those uniquely designed to tap sixth freedom traffic flows. From our vantage point in Saudi Arabia with a sizeable local market and looking at the opportunities in the region, our view is that the potential is a long way from being tapped, provided governments in the broader region support the growth in low fare travel for customers who would not otherwise fly.

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