Aviation Outlook: Jahameh defends RAK Airways suspension as focus moves to yield

Jahameh gave the keynote address to the Aviation Outlook MENA conference in Dubai today.

“The suspension is a negative and has been seen as that. But the reality is that if we look at 2008 as then a new airline we saw the air transport industry in crisis. According to IATA there was an industry loss of $10.4bn. The ground was shifting and the whole air transport industry was shaken. The decision was made to suspend the airline and protect the capital investment of $200m.”

By reemerging in 2010, Jahameh said, the airline became stronger and had found a different segment.

“We are not a low cost carrier,” he said. “We provide the service that a full service carrier might with baggage allowance and meals – but we do it at a low price. We are able to do that because we are consolidating everything we do such as catering and duty free.”

Jahameh said RAK had looked at its own domestic demand within the emirate. “We have a large cement industry with more than 5,000 expatriate workers, mainly from the Indian subcontinent. We looked at how they would travel and then worked with the company to make sure we could deliver what they needed.”

The result was the re-launch of flights to Calicut, Dhaka and latterly Jeddah and Cairo.

“We saw opportunities for Umra packages and have quite a large number of passengers using Ras Al Khaimah as the hub which does suggest more opportunities for us as a hub and spoke in the future,” Jahameh said.

Jahameh said the strategy of the low cost AED10 ($3) introductory fare created an impact.

“People were questioning were we safe?, Were the fares real and Who we were. But we had 700 bookings in the first four hours of our website going live.” Jahameh said the initial focus was on load factor and it achieved 70 percent but now the airline was “aiming at increasing yield while retaining the same load factor.”