Kuwait's Wataniya set for launch

By Graham Dunn

New Kuwaiti start-up operator Wataniya begins operations in January, undeterred by the difficult market conditions in which it is launching.

The carrier has taken the first of three Airbus A320s leased from Kuwaiti lessor ALAFCO to launch double-daily flights to Dubai in late January. It will operate the aircraft in a relatively low-density 122-seat two-class configuration, comprising 26 seats in the first class cabin and 96 in premium economy, and using Kuwait International Airport's Royal Terminal private ­aviation facility.

MORE ROUTES IN MARCH

Services to Bahrain, Beirut and a possible fourth destination, route approvals permitting, will follow in March this year when a second A320 arrives.

"Of course we would have preferred to launch in better economic times, that is obvious," explains former British Airways executive and OnAir chief George Cooper, who was appointed chief executive a year ago. "However, Kuwait is a petro-dollar economy, and even with oil at lower levels, there is still plenty of money in the economy." Cooper points to GDP growth of 9% in Kuwait in 2008 and projections for GDP growth of around 4% this year.

"93% of the Kuwaitis are employed by the government and the government is not about to downsize. So the travel pattern of Kuwaitis, particularly leisure travel, we don't expect that to change very much."

On the other side, Cooper points to the positive effects on the carrier's costs of sharply lower oil prices. "On the supplier side it has been a boon. We didn't hedge at all [so far], so we are going to benefit from that. The whole supply side of the market has softened - a year ago aircraft, pilots were hard to get, but all that has softened up."

Cooper points to the "good value" of Wataniya's proposition as a key selling point, alongside a schedule aimed at meeting the requirement's of Kuwait's day-trip business travellers.

Wataniya brought forward its launch by a couple of weeks after the early arrival of its first A320 and Cooper is pleased with the early response from the market.

"We've been very encouraged. We have gone out from late last year, with television and print advertising, which has emphasised the pride and heritage of Kuwait. We are positioning ourselves as Kuwait's latest achievement. The reaction to that has been tremendously positive. There are some flights now that are sold out in February.

"In Kuwait, which is where we think something like two-thirds to three-quarters of the market will be, with a 3 million population, it's relatively easy to get a high share of voice. By the time we fly there won't be a single person in Kuwait who doesn't know the colour purple or the name Wataniya."

The carrier will operate four aircraft by the end of this year, three leased from ALAFCO and another from US lessor International Lease Finance. It will take three more from lessor AerCap in 2010 to take its fleet to seven by the end of that year.

CLEAR FOCUS

Cooper says the focus of the carrier's business plan for the next two years is on its Gulf operations. "At that level, it's quite a good little business. I think there could be opportunities for the airline to develop further, but we need to be agile enough to take advantage [of them]."

But he stresses: "We have no aspiration, and never will have, to make this a massive network carrier. That is not what we as a company, or Kuwait as a country, needs or wants."

Wataniya, whose parent Kuwait National Airways listed on the Kuwait stock exchange at the end of last year, is targeting profitability within the first three years of operation. Kuwait has already seen the launch in 2005 and subsequent growth of budget carrier Jazeera Airways, alongside flag carrier Kuwait Airways.

© Reed Business Information 2009