Dubai Looks Towards "Budget" Airline

The city-state of Dubai, in the United Arab Emirates, has announced it plans to form a new low-cost airline, the sixth in the region.

"We are in conversation with the main manufacturers, Boeing and Airbus," Chief Executive Officer Ghaith al-Ghaith told Reuters Wednesday, one day after Dubai leader Sheikh Mohammed bin Rashid al-Maktoum called for the creation of the as-yet-unnamed carrier.

About 35 million people live in the Persian Gulf, many foreigners, and many of those are unskilled workers from South and East Asia. Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum appears to envision air travel as a key means of transport for workers of all economic classes.

Dubai already owns Emirates, the largest Arab carrier, and the world's ninth-most-profitable measured in revenue per passenger-mile, according to the International Air Transport Association. But pricing for the new airline will not be set with just profit in mind. The state-owned Emirates News Agency, WAM, reports Maktoum has ordered the new airline should set prices based on, "the economic and living conditions to suit their incomes."

Emirates is already the largest customer for the Airbus's A380, and has 246 aircraft orders pending from Airbus and Boeing, worth over $60 billion US. Officials say the new low-cost carrier will buy or lease an unspecified number of additional single-aisle narrow-bodies, either Boeing 737s or Airbus A320s.

The airline plans to order "as many aircraft as we can possibly operate, as soon as possible ... we want to start with a bang," Ghaith said. "We will make an order very soon."

Dubai is also investing heavily in its air transport infrastructure... beyond what many analysts believe the market can support. Dubai airport reported handling over 34-million passengers last year. A new airport, capable of 120-million passengers annually, is planned.

FMI: www.emirates.com