RAK Airways has gone through three CEOs in the last 12 months. Teckchandani had taken over for Jack Romero in February 2007, when it became clear that the airline’s launch would suffer delays. The initial launch date of October 2006 had been pushed to April 2007 and that deadline was not met either.
The company has not given a reason for the latest CEO shift.
The launch of charter flights is a temporary departure from the more ambitious goals that had originally been stated by the company. Indeed, RAK was initially intended as a full-fledged carrier, offering regular routes to and from several countries in the region, in order to support RAK’s fast-growing tourism and services industries.
Regular routes are still in the pipeline, the company insists. Countries such as Pakistan, India, Egypt, Iran and Lebanon are still on the airline’s radar, and it hopes to begin serving some of these destinations by October 1, 2007. On July 3, Khater Massaad, managing director, announced that RAK Airways planned to buy two Boeing 737-800, and lease an additional two, to complement the Boeing 757-200 it currently leases from Spanish carrier Iberia.
RAK Airways’ debut woes are not entirely surprising, or, for that matter, worrisome. The airline is entering a highly competitive and challenging market, with regional low-cost-carrier Air Arabia, operating from the neighbouring emirate of Sharjah and covering most countries in the region. Dubai Airport, less than 200 km away, is host to Emirates, the region’s largest carrier, with worldwide connections. Such strong competition makes it difficult for any newcomer to easily carve a niche of its own. Local competition seems set increase, too. According to the local press, Italy-based Neos Air will start a charter service to RAK next October.
But the local and regional markets are booming and should provide many opportunities for RAK Airways. The emirate’s tourism industry, which will likely provide the airline with most of its activity, is expanding fast. According to the RAK Tourism Authority, as many as half a million visitors already visit the emirate every year, and this figure is expected to grow sharply. Ten new hotels and resorts are expected to come up in the next five years, and as many as 30 to 40 in the next 10 years, said the authority. By that time, the flow of visitors should exceed 1m visitors a year, creating a thriving market for air carriers.
RAK Airways’ strategy is not entirely clear-cut yet, though. Most visitors to RAK, for instance, come from Europe – a market on which RAK Airways has not publicly set its sights.
Similarly, the airline will also have to decide what kind of carrier it wants to be. The company has stated it does not wish to remain a charter operator and favours a “regular carrier” model instead. However, the charter segment of the market has been left virtually empty as there are currently no UAE-based charter operators. RAK’s nascent tourism industry could greatly benefit from such a move. Historically, the development of charter flights has usually been deeply intertwined with the expansion of mass tourism. RAK-based charter operations would make a lot of sense as the emirate’s main attraction is its beach resorts, with tourists usually staying for a week – a kind of tourism that typically lends itself well to the development of charter operations.
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