Ras Al Khaimah, the northernmost of the seven United Arab Emirates, is intending to capitalise on its burgeoning development by offering flights on its own flag carrier from the first quarter of next year.

RAK Airways has indicated its network will include Bangalore, Cochin, Delhi and Mumbai in India, as well as the Iranian cities of Isfahan, Mashad and Tehran. The Ras Al Khaimah government declared earlier this year it would establish its own flag carrier although the UAE is already home to three state-backed airlines - Sharjah-based budget carrier Air Arabia, Dubai-based Emirates and Abu Dhabi-based Etihad Airways.

But the plan has already been overhauled. New chief executive Jack Romero, one of the team involved in creating British Mediterranean Airways, has thrown out the business plan to shape RAK Airways as a low-fare airline.

"I found that the ingredients to make [a low-cost carrier] work were not there," he says, citing the regulatory environment, lack of secondary airports, difficulties in obtaining discounts and Ras Al Khaimah's small catchment area. Dependency on travel agencies and expectations of inclusive on-board service also worked against the plan.

"When we did our sums, we could see it would never work," he says. "With Air Arabia down the road there is no way you're going to attract passengers out of Sharjah.

"We've looked at several models. You can't really market-straddle. You're either a full-service carrier or you're not you're either a low-cost airline or you're not."

Romero says Ras Al Khaimah is benefiting from Dubai offshoot growth and is developing as a leisure destination in its own right, with dozens of high-quality hotels under construction. RAK aims to attract business travellers drawn to the flexible local economy and individuals from the labour markets.

Future expansion will include European routes and Gulf Co-operation Council destinations. RAK expects to transport 230,000 passengers in its first year with Boeing 737s and 757s.


Source: Airline Business