Mahan proves that charity begins at homw

It's not often that a charitable organisation starts an airline. It is even less often that such an airline becomes an international carrier spanning two continents. That, however, is precisely the story behind Mahan Air, currently the third largest airline of the Islamic Republic of Iran.

In the early 1990s, the businessmen behind credit co-operative Mol Al Movahedin became increasingly frustrated at the lack of air services between Tehran and their home province of Kerman by national carrier Iran Air.

They felt strongly that Kerman ’s economic development would be hindered unless more flights were provided. They decided to take the matter into their own hands. The carrier that emerged from their efforts, Mahan Air, was Iran ’s first private airline. It is now number three in Iran and anticipates taking over the number two slot from Iran Aseman Airlines in the near future as it continues to grow, according to director of marketing and route development Hossein Hosseini.

From its first flight between Tehran and Kerman in 1993, Mahan Air has grown steadily. Its first international route, to Damascus , opened in 1994; it carried its millionth passenger in 1996 and began flights to Dubai , one of its busiest sectors, two years later. Passenger numbers on the Dubai and Bangkok sectors became so great that the airline served them with Boeing 747-400s.

The airline’s initial equipment consisted of two Tupolev Tu-154s, but its expansion really began to accelerate with the arrival of Airbus A300s in 1999 and it carried its 10 millionth passenger in 2006.

In recent years it has expanded both west and east. Flights to Duesseldorf cater largely for business traffic in winter with more VFR (visiting friends and relatives) trade in summer, while Bangkok is a popular destination for German tourists.

Flights between the UK and Iran have never been the heaviest-travelled of sectors, but Hosseini said Mahan Air has found a market among the large Indian population of the English Midlands, who fly from Birmingham and transit Tehran en route to one of Mahan Air’s main Asian destinations, Amritsar . And, like their German counterparts, UK tourists have started to use the Iranian airline for onward flights to the Thai capital.

Haj flights to Saudi Arabia are another major source of passengers.

The Iranian domestic market is a major one (13m passengers in 2008) and Mahan has tapped further into this in recent months by adding three new domestic destinations – Awaz, Bandar Abbas and Zahedan – to its internal network, taking the total to 12 .

Hosseini said the company is gaining a reputation within Iran as a modern, attractive airline with a good safety record (it has never had a crash) and is expanding “very rapidly” in the domestic market.

Despite its good safety record, however, it found itself banned from the UK in summer 2007 after two incidents of abnormally low approaches to Birmingham airport. It was then banned from European Union airspace in September that year for not meeting EU safety standards. Hosseini accepts that these had to be brought up to modern levels, but notes that EU inspectors have confirmed that the necessary corrections have been made and the airline was given a clean bill of health in July 2008. Flights have since resumed to Germany and the UK .

Internationally, Mahan Air has major plans to expand. Over the next six months it intends to start flying to Shanghai , Almaty, Kabul and Erbil .

Over the years, said Hosseini, the usual pattern of expansion has seen Mahan Air prepared to take on a new route, even if it is not initially completely viable. It will start the service, then work hard at improving load factors and yields. Typically, a year of expansion will be followed by a year of consolidation. It has been a controlled, disciplined process, he explained.

One thing that concerns him about the regional marketplace is the rapid growth of airlines in some other Gulf nations, such as Qatar and Abu Dhabi . “We think they are just buying aircraft, then trying to find destinations. That will really disturb the market in a very bad way, because there is so much capacity,” he said.

Mahan Air is not exposed to the full force of what he described as this “uncontrolled expansion” because to some extent it operates in markets that are niche, or appeal particularly to Iranian customers who are prepared to pay for the benefit of direct flights to destinations, rather than transiting some of the better-known airports in the Gulf. For these reasons Mahan Air does not have yield problems, said Hosseini.

Expansion is also underway on the ground: in 2008, Mahan Air opened a new catering facility employing 600 people capable of producing up to 24,000 meals a day for both itself and other airlines. And a new maintenance centre is currently being fitted out at Tehran ’s Imam Khomeini Airport that will be capable of handling five wide-bodied aircraft simultaneously when fully operational.

Facts and figures

• Mahan comes from the Farsi word meaning ‘great’
• Mahan Air flew 2.7m passengers in 2008, 60% of them international.
• The bulk of its fleet comprises various models of Airbus A300s and A310s. Two Boeing 747-300 Combis and three -400s handle the busiest routes, while two BAE146-300s are used for short-haul domestic sectors.
• Its HQ is at Tehran .