airblue Studies UK Growth Options

Pakistan’s second largest carrier, airblue, is in discussions plans to expand its activities in the UK market as it embarks on a fleet expansion following the arrival of additional A320 Family aircraft and its first A340-300 widebody jets. The airline is studying new flights to London and Birmingham while it plans to also increase its presence in Manchester, an existing market for the carrier. A new link to Jeddah in Saudi Arabia is also due to be introduced, subject to the carrier securing traffic rights.

airblue was established in 2003 and inaugurated operations on June 18, 2004 initially on domestic routes from Karachi to Islamabad and Lahore. International flights commenced just a year later on August 14, 2005, initially to Dubai International, and subsequently the carrier has added Abu Dhabi, Istanbul, Muscat and Sharjah to its network. It now operates six A320 Family short-haul aircraft (a mix of A319s and A320s) and will add two former Turkish Airlines A340-300s to its fleet later this month. The airline also remains in talks to introduce four turboprop aircraft this year in order to expand its domestic market.

The airline made its debut in the UK market in September 2010 when it introduced flights between Islamabad and Manchester. These currently operate via Istanbul Sabiha Gokcen. As the table below illustrates, there is a sound demand for air services between Pakistan and UK with strong Pakistani diasporas across the UK.

The Pakistan – UK market is currently dominated by Pakistan International Airlines (PIA) which during 2011 accounted for 94.9 per cent of the non-stop seat capacity between the two countries. The airline currently provides links from Islamabad, Karachi and Lahore to four destinations in the UK: London Heathrow, Birmingham, Manchester and Leeds Bradford (up until last year it also served Glasgow). British Airways (BA) also previously served the market but suspended its flights following a terrorist attack devastated a Marriott hotel in Islamabad in September 2008 killing more than 50 people and injured around 250 more.

The departure of BA from the market resulted in a 14.2 per cent decline in seat capacity in 2009 but growth from PIA and the arrival of airblue in the market has meant that capacity has grown in the past two years, with O&D demand also seeing a rise. According to OAG data, capacity for the current year is expected to decline by around 10 per cent so the announcement from airblue will backfill some of this lost availability. In the first half of this year an estimated 513,250 O&D passengers flew between Pakistan and UK, down 3.7 per cent on the same period last year.

Speaking to The HUB this week, Raheel Ahmed, Director Commercial, airblue confirmed some of the airline’s growth plans. “As far as expansion is concerned, yes we are looking to expand in the UK for which we are carrying out the feasibility for Birmingham, and London, however, we are also looking at other destinations in Europe,” he confirmed.

“UK is a big market for Pakistani carriers and airblue would love to provide service to the Pakistani Community over there. They have supported us wholeheartedly in Manchester and I am sure they would support us in other major cities of UK as well. We strive to provide affordable travel coupled with quality service and flexibility in terms of timings and schedule,” he added.

According to industry sources, Birmingham flights, if launched, will likely be operated three times weekly using one of the carrier’s two soon to be delivered A340-300s, which will reportedly be configured in a 342-seat layout. The London flights will be served via Istanbul and will likely serve Luton Airport in the UK capital, although airblue has not given up hopes of securing slots at London Heathrow.

airblue’s current three times weekly link between Islamabad and Manchester via Istanbul will is expected to be operated non-stop using the airline’s new A340-300 and is likely to see frequency growth up to five times weekly. The airline is also expected to introduce twice weekly services to the UK city from Karachi and Lahore, again using the A340. These proposed new flights from airblue could introduce around 2,500 additional seats a week in each direction between Pakistan and the UK.