Kabul-headquartered Safi Airways is confident that it would be able to resume services to Frankfurt by March next year despite an existing flight ban imposed by European Union authorities on all Afghan carriers, a top executive said.
Speaking to Alrroya.com on Sunday, John Roijen, chief financial officer of
Safi Airways, says they are currently in talks with a European partner. When finalised, the deal will allow them to use their partner’s air operator’s certificate (AOC) and fly back to Europe using a Safi aircraft and livery.
“We believe we have found the right partner and [this deal] looks [set] to succeed. We’ve allocated a new aircraft for [this route], an Airbus 330-200, which can operate [by] March and we’re definitely going to fly back to Frankfurt,” Roijen confidently said.
The executive, however, refused to divulge further information regarding their prospective partner or details about the negotiation as discussions have not been finalised yet.
Afghanistan-registered airlines were
slapped with a ban by the European Commission in November last year, forcing Safi Airways to abandon its German operation, which was starting to gain popularity among Afghans residing in Europe.
Since late last year, the company has been looking at options in order to circumvent the ban. Roijen said that aside from signing a partnership with a European company, Safi has also began the process of applying for an AOC from the UAE’s
General Civil Aviation Authority (GCAA).
“At the moment we are in acceleration to get an IOSA [Iata Operational Safety Audit], which we hope to finish in October. By November we will have the audit and we should get the [IOSA] certificate by December. With that certificate, we would be able to apply for an AOC [in the UAE],” Roijen explained.
New Delhi flying high, Jeddah on hold
Safi Airways on June 15 has launched a new direct service operating four flights per week between Kabul and New Delhi, which Roijen said has been received very well by the market. The flights have been enjoying an average load factor of 70 per cent and in recent weeks have even gone higher.
“[New Delhi as a destination] has been very successful. The first flight [on June 25] was full and going forward we fly about 70 per cent load factor. Last week, we even saw our load factor increasing to almost 90 per cent,” he said.
Despite this, operating the new destination was without its own share of challenges. Roijen admitted that following the launch of their New Delhi service, they have received complaints from other carriers operating the same route for unfair competition due to their low fares.
“Our competitors in Afghanistan were complaining about our fare so as of this week, we have to increase our fares by about 50 per cent otherwise we would be banned from even flying to New Delhi,” he said.
Roijen added that politics is one of the major challenges that they are currently facing as an airline.
“It’s a big issue in the airline [industry], especially if you’re expanding and profitable, you’re being watched. In New Delhi, for instance, we were able to make profit on a rate of $180, but we were forced to increase to about $250 per ticket. Okay, it’s more profit for us, but it doesn’t help [passengers] to get cheaper tickets,” he said.
He attributes this to the lack of an open skies policy between Afghanistan and India. The same issue, he said, will be the reason why low-cost carriers in Afghanistan will have difficulty taking off.
The massive increase in fares, on the other hand, did not dampen passengers’ confidence in flying with Safi Airways. Roijen said that following the ticket price hike, their fares are now in line with their competitors.
He expressed optimism about the New Delhi market as he disclosed their plans to increase frequency to seven flights per week by August. Roijen added that they are also considering using their wide-body Boeing 767 aircraft on this route, instead of the current Airbus A320-200, due to the huge cargo demand.
In May Safi Airways announced that they are also eyeing to launch direct services to Jeddah in Saudi Arabia, but Roijen said at the moment they are putting the plan on hold.
“Jeddah as a continuous route will not happen for now because based on [our] calculations, it is not profitable enough for us,” he said.
The company, however, plans to launch services this year to the Afghan city of Kandahar from Kabul, as well as from Kandahar to Dubai. By 2012, Safi Airways hopes to expand their wings further to a second destination in India via Mumbai, and to Karachi in Pakistan.
Q2 performance promising despite oil concerns
Roijen said Safi Airways has had a bright second quarter as they manage to post profits, a first in the airline’s five-year history.
“Starting March we managed to break even and in April we became profitable. Now we are in a situation where we can look at [having] brand new aircraft,” Roijen said without giving the exact figures for their second-quarter performance.
Volatile oil prices, however, continues to pose challenge to their operations. Jet fuel currently accounts for about 33 per cent of their costs, which is already an improvement compared to last year’s 40 per cent. Roijen attributes this development to better yield management.
Safi Airways is also expanding its fleet (currently one Airbus A320 and one Boeing 767) to include three Airbus A320 jets to be delivered in August, December and February.
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