Dabbas calls for fairer Open Skies with Europe

Royal Jordanian chief executive Hussein Dabbas has called on the Jordanian government to consult with airlines before making decisions on Open Skies agreements.

Dabbas, who took over as CEO at RJ two months ago following a career rising through the ranks with the Jordanian national carrier, says inter-governmental meetings about deregulation can sometimes miss the reality of the business.

“I am all in favour of Open Skies,” Dabbas said at a presentation in Amman today. “But I am in favour when the agreements are bilateral. When they are equal.”

Dabbas said the latest agreements could see airlines like British Airways being able to fly to Amman from anywhere in Europe. “But if I want to take a second daily flight to London Heathrow, I can only do it if I pay £40m ($65m) for a slot.

“The same is true with Frankfurt. It took me three years just to get an agreement to move one flight time by five minutes just so as we could unify arrivals. It is ridiculous. If they are going to take away my traffic to the rest of the world and bring it via London or Frankfurtthen I have to fight.”

Dabbas also criticised airlines who were price dumping. “ We see it Al Jazeera to Kuwait 4JD (US$ 5.67) or BMI announcing flights from Amman to Amsterdam via London for 92JD ($130). This is way below the real cost of the flight.

“We have open skies with UAE, with Saudi Arabia, with Lebanon but with these we have bilaterals. My message to the Government is make it fair.”

Dabbas said he was not bothered by the number of low cost carriers springing up in the region.

“The business model like Ryan Air and Southwest is not applicable in this part of the world,” he said. “ We see more of a low fare here than a low cost. LCCs go point to point at secondary airports and make their revenue from ancillary sales. The breakeven point is 110% seat factor.

“Already we are seeing the regional low cost carriers changing their models. They want to go to dual class. There are no secondary airports here. If you go to Bahrain you land at Bahrain airport or you don’t go. If you want to go to Kuwait you land at Kuwait airport. There are no cheaper cost alternatives, no reduction in handling charges to save money.

Unlike Europe or USA they are not getting much on the internet. There is nothing like the access to the internet in the region so travel agents still make the sale. There is also resistance to credit cards.

There is capacity for growth. I expect to see double digit growth once the downturn is over and the LCCs can do well. But there are still lots of barriers. For example Jordanians need visas to visit the Gulf states and you need a sponsor etc. That will affect the impulsive traveller.”