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FlyDubai targets India’s secondary cities as accord opens market

LiveMint logoLiveMint 10-06-2014 Deena Kamel Yousef

Dubai: Low-cost carrier FlyDubai said it’s targeting flights to secondary airports in India as an inter- governmental agreement grants it greater access to a country that supplies millions of migrant workers to the Gulf.

FlyDubai began serving Delhi, Cochin and Thiruvananthapuram this month, doubling the number of Indian destinations. Under a bilateral accord between India and the United Arab Emirates (UAE), it has gained about 4,000 seats to the subcontinent to be deployed this summer and over the next two seasons, chief executive officer Ghaith Al-Ghaith said in an interview in New Delhi.

“There is a huge potential in secondary airports that we believe will enable more simple people, people who do not have access, to connect to Dubai,” the CEO said, adding that FlyDubai might be interested in taking a stake in an Indian carrier if the Dubai government were to allow such a move.

FlyDubai deploys almost 5% of its capacity to India, a market Ghaith said is so underserved that any airport offered will provide a successful route. India has announced plans to upgrade as many as 35 non-metropolitan facilities, though the target date was 2010 and nothing has yet materialized. A 1997 plan to build a second Mumbai airport met with resistance from farmers over land-acquisition issues, and work is yet to start.

Business berths

The three Indian routes added this month will be served by aircraft also fitted with business-class seats as FlyDubai targets corporate traffic, as well as the migrant labour market. Its initial destinations in the subcontinent were Ahmedabad, Hyderabad and Lucknow.

FlyDubai has an open mind on partnerships and commercial ties with other airlines, including those in India, Ghaith said. An equity investment would currently not be allowed given the carrier’s mandate to focus on Dubai, though might be attractive as long as the market is mature enough, he said.

The no-frills airline is seeking diversified funding sources and lower rates as it talks with banks about raising as much as $500 million through a bond or Islamic sukuk issuance, the CEO said in the interview on Monday.

FlyDubai has a fleet of 36 Boeing Co. 737-800 planes that serve a network of 74 destinations, according to its website, having placed an order for 50 of the short-haul planes in 2008.

The carrier on 6 January firmed up an order for 11 more of the same model plus 75 737 MAX 8s, a re-engined version, with a list price totaling $8.8 billion. Bloomberg

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