Gulf Carrier RAK Mulls Boeing, Airbus or Bombardier Deal
RAK Airways, based in the northern Gulf emirate of Ras Al Khaimah, said it’s in talks with Boeing Co. (BA), Airbus (EAD) SAS and Bombardier (BBD/B) Inc. about an order for at least 10 single-aisle aircraft to meet expansion plans.
State-backed RAK is looking at the existing versions of the Boeing 737-800 and Airbus’s A320, together with the new CSeries jet from Canada’s Bombardier, and aims to make a choice by the end of this year or early in 2014, Chief Executive Officer Murabit Al Sawaf said in an interview in the sheikdom.
RAK is seeking to carve out a niche in one of the world’s most competitive aviation markets, with the United Arab Emirates home to five separate airlines operating full-size jets, four of them offering short-haul services. The carrier, which began flying in 2007 before suspending scheduled operations during the global slump, plans to expand its network to 40 cities by 2015.
“Ras al Khaimah is growing in an aggressive way, so we should be as aggressive as the government,” he said. “In five years I want the company to be one of the major airlines in the region. In five to 15 years we’ll be on a curve to go upwards to have a worldwide position and international identity.”
RAK Airways currently serves nine cities including Cairo, Doha in Qatar, Kathmandu in Nepal, Jeddah in Saudi Arabia and Chittagong in Bangladesh using two A320s and two 737-400s. The carrier attracted 300,000 customers in 2012, predominantly migrant workers and tourists, and is targeting a profit in 2014 after boosting the first-half passenger count 40 percent.
To meet immediate expansion plans, the company has signed a deal with International Lease Finance Corp. (AIG) to take an Airbus A319 and crew in two weeks and an A320 in two months.
Destinations to be added in 2013 include Amman in Jordan, its first route to the Levant, and Islamabad, the carrier’s third destination in Pakistan, where 600,000 expatriate workers in the U.A.E originate, both to be served from August. Services to the Saudi cities of Riyadh and Dammam will follow.
“It’s the right time,” Al Sawaf said. “The potential here, especially the Middle East and Far East, the booming we see, compels us to keep up with the development.”
The carrier will need external funding for the planned order and has kept all options open, including bank loans, manufacturer financing and a bond issue, the CEO said. The airline could consider a share sale in the future, he added.
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