Saudi Arabian budget airline Flynas plans to open a hub in West Africa or the Balkans within five years to expand beyond its oversupplied domestic market, according to the airline’s chief executive officer.
"Since we are a short-haul carrier, we seek to link those hubs with the current hubs in Saudi Arabia," CEO Bander Al-Mohanna said Tuesday in an interview at a conference in Dubai.
"The demand is high but there’s overcapacity so ticket prices are less than the cost.”
Flynas, which is owned by Kingdom Holding, the investment firm of Prince Alwaleed Bin Talal, has 20% of the domestic market and expects to grow passengers by at least 6% in the next five years. The carrier competes with three other Saudi-based carriers on internal routes, which weighs on fares.
"Last year we started exploring markets that are untapped by other Saudi airlines, such as Georgia, Azerbaijan and Vienna,” Al-Mohanna said.
The carrier is expected to conclude negotiations with Airbus SE or Boeing Co by the end of year to buy at least 10 wide-body jets. The decision to choose Airbus A330neo or Boeing 787-9 planes depends on the engine makers.
"If Rolls Royce doesn’t resolve the problem with its Trent 1000 engine, we won’t be signing with them," he said. Rolls is the only supplier for the Airbus plane.
The CEO also said:
- Flynas is in talks with international banks for up to $300 million loan or sale and lease-back to finance five Airbus A320neo jets
- The airline will decide by the end year the number of A320neo planes on order that will be converted to larger A321 variant
- Flynas has orders with Airbus till 2026 but the carrier is negotiating with the plane-maker to speed up production. It will receive four A320neo planes this year and nine planes in 2020
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