NAS Air stretching internationally

Edward Winter, CEO of NAS Air (National Air Services) spoke to SHALU CHANDRAN.

What are the company’s plans for 2008?
Up until now, we have had a very extensive domestic network to 21 cities within Saudi Arabia.

But clearly our objective has always been to fly internationally because that way we can take our services across the region. So, we launched our first international flight from Riyadh to Sharjah and shortly after that our second international route was from Jeddah to Sharjah.
We acquired brand new A320’s to operate this route and our fleet of three A320s will increase to eight by the end of 2007 as more routes are launched.  We currently own two Embraer 195’s and have plans to buy three more by the end of the year.

Are you looking at new markets?
Our ambitions are to expand internationally as rapidly as we can. I hope that in the near future we will be announcing routes into Pakistan, India, Egypt, Sudan and around the region into Jordan, Syria, Lebanon, Abu Dhabi and Dubai. Pakistan is a key market for us and we are expecting to announce flights to the country within a month’s time.

Have rising fuel costs impacted the airline?
All our routes are regulated by a fare cap by Saudia. Fuel accounts for more than 30 per cent of the airline’s costs at the moment and so we have been lobbying the government to grant us the same discounted fuel prices as Saudi Arabian Airlines. At the moment on most domestic routes, even with 100 per cent bookings, at fare cap we still lose money.

What have been the company’s major challenges?
I think its always challenging in a brand new market to educate people about your brand and I think we are really quite radical in that manner. 
We expect to break even this year and make our profits by in 2009. Last year Nas Air made a loss because of the fare caps.

Any plans to launch an IPO?
Yes, NAS is looking to launch an IPO by the end of the year.  But it would not be an IPO for Nas Air alone, but for the group as a whole, which comprises of Nas Air, Al Khayala; NetJets ME and other government businesses. As of now, we are looking to value it at $2bn.

What has the load factor been since your launch last year?
So far we have been operating only on domestic routes and on those routes we have seen about 70-75 per cent load factor.  We then covered the public service obligations, which then saw the load factor fall. But with our new aircrafts, we hope to see an increase.