Tuesday, February 4, 2014

RAK Airways, Full Circle.

On January 1, 2014 RAK Airways suspended operations for the second time, citing rising costs, the conditions of the aviation industry and geopolitics. The airline indicated that the board will review the state of the airline and decide whether the airline will resume operations.

As usual things move fast in MENA. On February 2, 2014 Ras Al Khaimah Directorate of Civil Aviation signed an agreement with Air Arabia, designating it the National Carrier of Ras Al Khaimah. This morning February 4, 2014 Adel Ali, Air Arabia Group CEO confirmed to Dubai Eye that Ras Al Khaimah will be the airline's fourth hub and will be basing its aircraft there to operate to destinations in the Middle East and the Indian Sub Continent.

RAK Airways was founded in 2006 as the fifth UAE national carrier based in Ras Al Khaimah. It started operating in 2007. By 2009 the airline suspended operations. It announced the resumption of operations in 2010 but actually restarted in 2011. The second time around the airline was more organized and operated to ten (10) cities  (Abu Dhabi, Riyadh, Jeddah, Doha, Amman, Peshawar, Lahore, Islamabad, Calicut and Katmandhu) using two A320s in two (2) class configuration 8 Business and 160 in Economy.  RAK Airways operated to Abu Dhabi and had a code share with Etihad to London Heathrow, Manchester, Dublin, Geneva and Bangkok.

RAK Airways never had a defined business plan, other than the usual rhetoric of development of tourism and aviation in Ras Al Khaimah, and if it did it was never published. The airline had 7 CEOs in as many years.

Ras Al Khaimah is emerging as a tourist destination with 1.2 million visitors last year and global hotel chains like Hilton, Waldorf Astoria, Crowne Plaza, Rotana and others opening hotels and resorts in the emirate. These tourists preferred to fly to Dubai, since the majority of them came from destinations not served by RAK Airways.

Ras Al Khaimah government realized that going it alone in the Northern Emirates with their 800,000 inhabitants is not going to work out. Developing tourism using limited regional destinations does not work when most of the tourists hail from Europe and North America.

The question that raises itself now is how would Fujairah react to all of this, if at all? The emirate is developing into an important oil terminal with oil related industrial activities after the inauguration of the pipeline from Abu Dhabi to Fujaira. It boasts tourist areas like Khor Kalba, Massafi and the proximity to Khor Fakkan, the Sharjah resort on the Gulf of Oman. It is linked by a modern super highway to the major cities of the UAE, reducing travel times.

Another interesting issue will be the Ajman International Airport (under construction) which is in close proximity to Sharjah International Airport and Dubai International Airport and is raising ATM concerns within the UAE.

We wait and see


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