Graham Newton spoke to Ghaith Al Ghaith, CEO of flydubai, on the vision for the airline
Is flydubai set to continue its extraordinary growth?
It has been an amazing experience so far. We are in our ninth year since flydubai was founded now and I can still clearly remember the beginning — talking about our plans, about how we were going to grow, and devising the strategy. I am glad that we have achieved everything we set out to do.
I am sure we can continue growing in our market. We serve 59 destinations that were not previously served from Dubai. And we have developed frequencies that few people thought were possible. We are creating something new. The airline is breaking boundaries.
At the moment, only around 3.5% of our seat capacity is to India so there is much more room to grow there. I am also optimistic about the opportunities in Iran. It has huge potential and we’ve only been flying there for just over two years.
That’s why we’ve ordered many more aircraft. We have 55 Boeing 737-800s in our fleet at the moment. At the Dubai Airshow in November 2013 we ordered 75 737 MAX 8s and 11 Next-Generation Boeing 737-800s. In addition, we retain purchase rights for 25 more 737 MAXs.
I’m comfortable with our growth, to date and in the future. I’m confident that there is still so much more to come from the region.
How do you decide on your destinations and is Emirates’ network an influence?
At flydubai, we just look for an opportunity. It is as simple as that. It really doesn’t matter whether Emirates fly there or not. As long we have the right to fly, we look at the potential of a destination and if we think it makes sense for us to fly there, we will.
As mentioned, we have plenty to do in the region, within our flying radius, so there is no need to look further afield for the time being. We’re not interested in long haul as most people define it and we have no plans to order different aircraft. We will stick with the Boeing 737s.
At the end of November 2016, we started to serve Bangkok twice a day. There is huge demand for Bangkok, for Thailand, and for the region. So connecting with Bangkok made sense. It was an opportunity not to be missed.
How do you keep costs low as you expand?
You just have to be as efficient as you can be. We have one aircraft type and we put in a big order in 2013, which kept the price per aircraft low. We only keep our aircraft eight years before moving them on so they are cheap to maintain and fuel efficient. We aim to utilize them 14 hours a day.
We are also lucky that the fuel price is very low at the moment. Fuel accounts for 23.5% of our total operating costs, down from 30.6% last year. And we have reduced our hedging position too.
But there is a part of the equation that many people do not realize. When oil is cheap, it puts pressure on our governments, on our economies, and on us all. Of course, we like having a low fuel price but where a government spending is in deficit you must be wary about how you proceed.
We have unbundled the product as is usual for a low-cost carrier (LCC) but we are open-minded about what else we can do to keep costs low or drive new revenue streams. We have an in-flight entertainment system that passengers can choose to pay for, for example, and we have introduced business class. This isn’t the norm for an LCC but, as with our network, we look for an opportunity. We respond to our passengers and our market.
What are the main challenges facing flydubai?
We live in a much smaller world. Everybody is connected to everybody else, economically and culturally. Airlines have enabled this and they will continue to unite the world. But that inter-connectivity brings its own challenges. Primarily, even though we are connected — and want to be more connected — we can’t control everything. So, we cannot dictate what other governments do and what their aviation policies might be.
If we are to continue doing our job well, we need open skies across the region. The United Arab Emirates (UAE) has open skies, of course, but that is not the case for most countries in our region.
And open skies are not enough on their own either. We must have a relaxation of the visa situation across most of the region. About 80% of the people in Dubai are expatriates and most of our passengers need a visa for the majority of places we fly them to. It would be much easier to for everyone to do business if we could find a solution and make travel easier.
What new technologies do you believe will be the most influential in the years ahead?
We are living in a world that is becoming increasingly technologically-savvy. That means flydubai has to respond to that and provide products that enhance the passenger experience. We are always trying to introduce new ideas and new technology.
But we are quite fortunate. This is not a region that is first in new technologies. So, we have the chance to look at Europe and the United States and spot the trends and see what is working. For me, it boils down to providing access — for the customer to the airline and for the airline to the customer. I’m also very excited about Wi-Fi and live TV. If we can keep the passenger connected, it not only enhances their travel experience but also enhances our service levels. We can use that connectivity to make our crew and staff more efficient in responding to requests.
Are you happy with the infrastructure at Al Maktoum International Airport? And how will you use the two Dubai airports?
We’re already using Al Maktoum International (DWC) quite extensively. We’re really happy with it. It’s a great facility and we are able to operate efficiently. Our turnaround times are excellent, for example. The development there is exciting and it will be our main airport for the foreseeable future.
But we’re also using Dubai International Airport (DXB) and that is an excellent facility too. In fact, I can envisage a future when we might concentrate on DXB again. It very much depends on the scenario and we will continue to monitor things closely. But it is easy to see how Emirates might grow to dominate capacity at DWC and at that point it might make sense for flydubai to be based at DXB.
It is a possibility, nothing more than that. The scenario could play out in a number of different ways.
Are you confident that the airspace challenges in the region will be solved?
I have complete confidence in our government and regulator to ensure the infrastructure in the sky matches that on the ground. There are challenges but, as usual, the UAE will move a lot faster than anybody expects.
This is a productive, forward-looking region. We will solve the airspace challenge. After all, it has not stopped us so far.
What makes a good airline CEO?
To be successful anywhere or in any job, you need to get the best out of your team and make the most of the culture and environment you are in. If you can align that with a vision of how the business should progress, it will continue to reach new heights.
Ghaith Al Ghaith
March 2008 - present day, Chief Executive Officer of flydubai
February 2015 Independent Non-Executive Vice Chairman, Jumeirah International
2009 and 2011 Awarded Aviation CEO of the Year at CEO Middle East Awards
August 1995 - March 2008 Executive Vice President of Commercial Operations Worldwide of The Emirates Group
October 1994 - August 1995 General Manager of Commercial Operations for Middle East, Africa & CIS, The Emirates Group