Pe@rson
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UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 5:37 am

Airfares from London to Saudi Arabia are, on the whole, expensive to very expensive, primarily, if not exclusively, due to the lack of competition.

There is a clear demand between London and both Jeddah (JED) and Riyadh (RUH) and vice-versa. There is probably also demand, although perhaps considerably less, to Dammam (DMM).

At the moment only SV serves JED from London, although BD shares the route with the Saudi national airline to RUH.

Hypothetically speaking, which would be better for a potential new airline on the London-Saudi Arabia market: either flying LON-JED-RUH-LON daily; flying LON-JED-RUH-JED-LON daily; or flying LON-JED-LON four-times-weekly and flying LHR-RUH-LON thrice-weekly?

Furthermore, I realise that a number of businesspeople fly from London to Saudi Arabia and vice-versa. Which does this apply to more: JED or RUH (the capital)?

What is the cargo demand like on UK-Saudi-UK?

Any additional points?

Oh, of the business demand, is there sufficient demand for first class, or merely business?

Don't worry: I'm just curious.  Smile

[Edited 2005-10-02 22:51:09]
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
Christa
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 5:46 am

Why not fly via IST, DME, LCA...

Regards,
Chris
Croeso i Faes Awyr Rhyngwladol Caerdydd - Welcome to Cardiff International Airport
 
Pe@rson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 5:48 am

Quoting Christa (Reply 1):
Why not fly via IST, DME, LCA...

Regards,
Chris

Because there's no need.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
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Vasu
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 6:01 am

Quoting Pe@rson (Reply 2):
Because there's no need.

Could be quite profitable if they routed through, say, LCA...
 
Avianca
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 6:05 am

the question is what airlines could offer new service?

do not think Saudia-Arabia would be a good destination for Virgin...and BA pulled out not to long ago.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
Pe@rson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 6:08 am

Quoting Vasu (Reply 3):

Could be quite profitable if they routed through, say, LCA...

Yes, but there's no need: it'd do perfectly well routing UK-S.A.-UK. Besides, the chances of obtaining fifth-freedom permission to carry passengers between LCA-JED-LCA and LCA-RUH-LCA is highly unlikely. Furthermore, you'd probably have to route LON-LCA-JED-LCA-LON four-times-weekly and LON-LCA-RUH-LCA-LON thrice-weekly (or whatever), thus reducing the appeal to the all-important businessperson, although you would enter two new markets: London-Cyprus-London.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
mhodgson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 6:12 am

Quoting Vasu (Reply 3):
Could be quite profitable if they routed through, say, LCA...

LCA is already a viable destination, with 2x daily BA flights from LHR; I doubt they would need to add RUH or JED onto that.
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Pe@rson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 6:12 am

Quoting Avianca (Reply 4):
the question is what airlines could offer new service?

It's a hypothetical question, so it doesn't really matter about the airline. However, who is to say that it must be an existing airline? A new airline, specialising in delivering high-quality service in markets which are underserved but where there is a good high-yield demand, would be nice. Saudi Arabia, I think, would fit it rather well.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 7:45 am

The market is certainly big enough for 2 players. Virgin was interested and virtually got it until the beards balked at their mascot. I think Virgin would've done very well, particularly since they have a fantastic reputation in Saudi. They could've charged whatever they wanted for upper class! BMI has to work harder to make it a success, but I think they can do well with some attention.

As for scheduling, I don't know, it depends. LH/LX virtually offer a daily service with 3x weekly LX + 3x weekly LH (on seperate days, making them the best for connections to Saudi). So they're cleaning out the market for frequency. So it's probably better to concentrate on less frequent, but larger load service.

As for business travel. Jeddah was the traditional commercial capital, but thanks to aggressive Riyadification it is no longer the case. The split is something 2:3 in favour of Riyadh.

I don't know much about cargo, but SV's European hub is in Brussels.
 
babybus
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 7:48 am

There is more demand for JED than RUH mainly due to pilgrims visiting Makkah on Hajj and Umrah.

The premium end of the market tends to be a farce as the majority tend to be government employees and their families travelling on free or concessionary travel.

AF got it right with their CDG-CAI-JED routing. There's a lot of traffic between CAI and JED. Haven't checked but I think they still run this service and I think with an A320.

It's only about 5 hours to Saudi so stopping en route is a bit of a drag.
and with that..cabin crew, seats for landing please.
 
Avianca
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 7:56 am

Quoting HiJazzey (Reply 8):
I don't know much about cargo, but SV's European hub is in Brussels.

it looks like they are doing very well....

check here the link
Top 55 Aircargo Airlines 2004. (by Avianca Sep 30 2005 in Civil Aviation)

I can imagine that they have a very high yield with cargo, because no consolidation of cargo is allowed for shpts to SaudiArabia... So they make the money that normally the forwarders are doing with consolidate the dense and volume cargo.... + there isnt much competition on the Europe-SaudiArabia cargo market its very hard to avoid the airline when you send cargo to SaudiArabia.

regards
Avianca
Colombia es el Mundo Y el Mundo es Colombia
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 7:58 am

Actually Babybus, that hasn't been the case for quite a while now. The concession tickets are long gone (much to SV's delight). The number of non-revs isn't high. Business is the main money maker.
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 8:08 am

Thanks for that Avianca,

They're doing well despite not being a large operator (and not focused on cargo). I wonder what a seperated cargo operation (as planned for privatisation) will be able to do.
 
Avianca
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 8:11 am

Quoting HiJazzey (Reply 12):
I wonder what a seperated cargo operation (as planned for privatisation) will be able to do.

you mean a own copmany like LH Cargo or VarigLog?
because they are already using MD11freighters...
Colombia es el Mundo Y el Mundo es Colombia
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 8:31 am

Yeah, that's what I mean.
 
Billy
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 5:05 pm

Not sure if you saw my note in another thread, but BMI will also be operating to JED come spring next year.

In terms of stats on the Saudi market, I have some so will dig them out.
 
diesel1
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 8:30 pm

Interesting questions.

It's worth looking back to understand why BA pulled off the Saudi routes - iirc it was due to lack of demand (due to political issues) - has the situation changed that much to warrant additional flights from the UK above what is already operated and planned?
I don't like signatures...
 
Billy
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 8:43 pm

I have pulled up some stats for the Saudi market, but they reflect the times before the BA pullout.

Annual pax (direct and indirect) between JED and the UK is 118,000 annual pax. LHR takes up 102,000 of these pax. To put this into context, the market from JED to France was 35,000. RUH-UK was the largest european market with 37,000 annual pax. France was again the second largest market with some 19,000 pax.

These markets are small but very high yielding. The JED figures are much larger because of the pilgrimage traffic that it generates. Medina is expected to draw more of this traffic as the saudis try and steer it away from JED. JED has serious problems of overcrowding in the regular and pilgrimage terminals. There are plans to build a new terminal for JED and they are talking about a five year programme.
 
Pe@rson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 9:12 pm

Thanks. I suspect the UK-Saudi-UK market will grow still further in the forthcoming years, so now (or 2006) seems like a good time for another airline to make a name for itself.

I am still wondering about whether a daily LHR-JED-RUH-JED-LHR or a daily LHR-JED-RUH-LHR service, or perhaps a four-times-weekly service routing LHR-JED-LHR and a thrice-weekly LHR-RUH-LHR service, would be best.

I suspect, without any official sources, that BD will end its LHR-RUH-LHR service in the coming months, unless it remedies some problems, like its wrong configuration. Time will tell.

Is there sufficient FARE-PAYING demand for both a business and first class to both JED and especially RUH?
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
Billy
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:07 pm

The AF 319 Dedicate operation to RUH is doing very well. I notice that the same to DOH and KWI have been cancelled.

AF and LH are delighted that BA pulled out of the market. Note that most carriers have the cost of ovenighting their crews outside of the Kingdom (with the exception of BMI and , I think Swiss).
 
Pe@rson
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:13 pm

Yeah, I imagine that both AF and LH (and other airlines, like LX, RJ and TK) must be doing well in view of the level of demand (pre-BA departure) to RUH and particularly JED.

Do we know the level of market share for those (and other) airlines?
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:16 pm

Hi Billy,

The numbers you give are quite different from those published by the Saudi presidency of civil aviation. According to them JED had 152,050 pax from UK in 2004 and RUH 86,652 .
http://www.pca.gov.sa/statistics/Yearbook_2004/p15.htm
 
whitehatter
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:19 pm

One of the reasons BA pulled out was due to security.

The British Government received intelligence regularly that BA aircraft were a terror target within Saudi Arabia, and this was one factor why BA pulled the route. At one stage crews were not allowed to leave the airport complex and crew changes were made enroute at additional stops in places such as LCA. BA staff were not allowed to overnight within KSA as they were deemed to be targets as well.
Lead me not into temptation, I can find my own way there...
 
cornish
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:20 pm

Quoting WhiteHatter (Reply 22):
One of the reasons BA pulled out was due to security.

The British Government received intelligence regularly that BA aircraft were a terror target within Saudi Arabia, and this was one factor why BA pulled the route. At one stage crews were not allowed to leave the airport complex and crew changes were made enroute at additional stops in places such as LCA. BA staff were not allowed to overnight within KSA as they were deemed to be targets as well.

Very true.

One assumes that because nobody outside of the UK has heard of BMI, they would not be considered at the same risk  Wink
Just when I thought I could see light at the end of the tunnel, it was some B*****d with a torch bringing me more work
 
Billy
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:34 pm

HiJazzey,

My figures are passengers routing exclusively from the UK via any airline and routing. The PCA figures are pax on flights to the UK, irrespective of their final destination. BA was a big connector of pax via LHR to the US. hence the difference in figures.

LH and AF need feed at their hubs. BA only carried 10,800 connecting pax at LHR to Europe (and 8990 to the US). LH carried 20,250 to Europe (excluding FRA) and AF carried 15600 to Europe (excluding CDG).
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:37 pm

BA had to pull out after they bungled their response to the security situation at the time, leading to a rise in operational costs and alienation of their customers (particularly the lucrative premium passengers). All BA needed to do was add a few security precautions on the ground in Saudi. Instead, they treated it like they're flying to a war zone.
 
HiJazzey
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:43 pm

Ah, thanks for clarifying, Billy.
 
Billy
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:45 pm

HiJazzey,
Part of the reason that they felt like they were flying into a war zone was that their insurers were asking a fortune for sending a 777 into a destiantion that had a threat. I am sure BA would have loved to continue, however the insurance costs were sky high. As BA were a named target then the insurers would have charged BA the cost of entering a war zone (in their eyes).

Although you may be upset about BA leaving the market, there were real costs to maintaining the service.
 
cornish
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RE: UK-Saudi Arabia-UK Market

Mon Oct 03, 2005 10:47 pm

Quoting Billy (Reply 27):
HiJazzey,
Part of the reason that they felt like they were flying into a war zone was that their insurers were asking a fortune for sending a 777 into a destiantion that had a threat. I am sure BA would have loved to continue, however the insurance costs were sky high. As BA were a named target then the insurers would have charged BA the cost of entering a war zone (in their eyes).

Although you may be upset about BA leaving the market, there were real costs to maintaining the service.

I wonder if they ever considered the possibilty of transferring the route over to BMed. I know it would still be seen as a BA aircraft, but they are more used to flying niche routes to what mighht be consdiered higher risk destinations thorugh the Middle East.
Just when I thought I could see light at the end of the tunnel, it was some B*****d with a torch bringing me more work

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