Friday, December 18, 2015

New airline Rayani Air aims to break even in three years

PUTRAJAYA (Dec 18): Rayani Air Sdn Bhd, which received its air operator's certificate (AOC) today and plans to launch operations on Dec 20, aims to reach break-even in three years, its newly-appointed managing director Jaafar Zamhari said.

"In our projection of cash flow, we anticipate the payback period to take three years," Jaafar said, but declined to reveal the amount of money the airline will invest to kickstart its operations.

Jaafar clarified that Rayani Air will operate as a full service carrier, competing with airlines such as Malaysia Airlines Bhd in the same market.

"But we still offer F&B (food and beverage) on board for sale just in case passengers need them," he told a press conference after a handover ceremony of the AOC from the Department of Civil Aviation today.

Jaafar said the airline is targeting a passenger load factor of 75%, above its  break-even load factor of 65%.

On its expansion plan, Jaafar said Rayani Air will consider all fundraising plans to help support its expansion plan, including an initial public offering (IPO).

"Part of the expansion plan (other than fleet expansion) includes expanding into the Umrah and Hajj flights," he added.

Jaafar also said as a new entrant to the local aviation market, Rayani Air does not see itself as a competitor to the established incumbents.

"Rather, we sees ourselves as an additional choice of airline that travellers can choose from," he said.

Jaafar said for starters, Rayani Air will mount two 22-year-old Boeing 737-400s to serve Langkawi International Airport, klia2 and Kota Baru, followed by Kuching and Kota Kinabalu in early 2016.

In the longer term, he said the company plans to add on another two 737-400s and two 737-800s to its fleet by 2017, as it increases its domestic routes and flight frequencies.

Jaafar also said Rayani Air's initial plan of setting up an operational base in Melaka airport was withdrawn due to limited capacity of the airport there.

"Langkawi International Airport became the choice of our hub for its growing tourism-based economy in Malaysia," he said.


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