CHUCK GRIEVE DUBAI
A new commuter airline in the Arabian Gulf, is linking the UAE cities of Dubai and Abu Dhabi. Will it succeed where others have failed?
Robin Cutts is a man for a quote. Like this one: "Airlines publish ambitions and then charge you for it." And: "Of course we know about airlines - we've all flown on them." Strong words for someone who has just sunk $3.2 million and a whole lot of credibility into starting his own.
"We're providing a bus service - we make promises and keep them," he says. He might well say that, because in October, he and the staff of Eyas Air Services, operators of the Shuttle, the Arabian Gulf's newest scheduled air service, were still awaiting the arrival of their aircraft.
Its two amphibian nine-seat Cessna 208 Caravans were having the final touches administered by float conversion expert Wipaire of St Paul, Minnesota, before being turned over to Cutts' four pilots - three Canadians and one American - for the long flight to their new home patch.
Come December, however, Cutts is adamant that the intercity Shuttle will be a familiar sight in the skies of Dubai and Abu Dhabi, flying businessmen on the hour, every hour, from dawn to dusk between the hearts of these two bustling neighbours in the United Arab Emirates. He had hoped to sign the venture at the Paris air show last June. Cessna was ready with the aircraft; Credit Agricole Indosuez was ready with long-term finance; Aerospatiale Matra was ready with its investment as part of its UAE offset programme - but one vital piece of documentation was missing, so it had to wait. Cutts was sanguine. With a shrug of the shoulders, he says: "In this part of the world, you learn to live with these minor set-backs."
It has been a long haul for Cutts, a former banker and financial director whose deal-making skills have been well tested recently. One and a half years ago, fresh from the sale of the courier and freight forwarding company in which he was a shareholder, he began pursuing his idea to operate a commuter air service between Dubai and Abu Dhabi. It has taken that long to convince enough people that his business plan is sound and to acquire the 51% local shareholding that the law requires of companies operating in the UAE. On the other hand, that time also allowed him to gain valuable support in the way of interline agreements with Emirates and Gulf Air. That could make the difference between success and - like earlier attempts to run the same service - failure.
In 1992, Emirates Express tried to make it work flying a 44-seat Hawker Siddeley 748 five times a day between Dubai Airport, which is reasonably central, and Abu Dhabi Airport, which is not. "The concept was different to ours," says Cutts, "and the difficulties that they faced eventually became insurmountable. Remember that this was in 1992 when many aspects of UAE life were different."
In 1995, City Link took off, also in amphibian Cessna 208s, and also linking central business districts by operating, on water, from Dubai Creek and Abu Dhabi Corniche, but there the similarity ends. While City Link had "tremendous staff enthusiasm", he says, the service was under-funded and under-priced. "Shuttle is a fully funded commercial organisation with total support from the many authorities required and its shareholders. We have employed professionals, and have a dedicated and highly trained work force with a quality, reliable product."
But do they know how to run an airline? "The Shuttle is a service. We have extensive experience of running effective service businesses both here and abroad," says Cutts. Technical aspects of the business are in the hands of experienced and qualified personnel - the pilots and the mechanics at Abu Dhabi Aviation, a long-established and publicly quoted company, who will handle servicing.
Cutts recruited Chris Davis, a 20-year veteran of the Gulf hospitality industry, as his chief marketing officer, and pulled ex-Cathay Pacific Gulf manager Don Ramsey out of retirement to become manager at Dubai. Heading the Abu Dhabi end of the operation is Mark Green, formerly operations manager for Memo Express courier company. Along with manager flight operations Rohit Dhamija, they will head a team of 25.
Key to the equation is whether there are enough senior businessmen willing to pay Dh350 ($100) one-way, Dh700 return, for the 30min flight, plus car service to the door. Cutts says his market research indicated there are. Certainly anyone who has to regularly face the traffic along the 150km-long (93 miles) of the Dubai-Abu Dhabi highway will welcome any alternative. "We're marketing the Shuttle as affordable, sensible and safe," says Cutts.
He is also instituting what may be the Gulf's first ticketless operation as well as a co-branded Diners Club card for frequent fliers. Then there is the connection with Emirates and Gulf Air. Both have "enthusiastically endorsed" the Shuttle, says Cutts, and will be selling it to their customers. Eyas will not, however, be cross-selling into either of the bigger airlines.
To those who still question the wisdom of treading where others have fallen, Cutts replies that the service is clearly and tightly targeted at a group of people who quite simply want, need and will use it. "We've had tremendous support form the local business community and the UAE General Civil Aviation Authority in getting to the starting point," he says.
The break-even load is an average of 2.5 passengers (less than 30% seat occupancy) per flight. As for the ticket price, the fare "is a true reflection of the cost of the operation." He acknowledges that it is much higher than what previous operators charged, but adds: "Why are they no longer with us?"
Given his knowledge of the often uncertain business conditions in the Arab world, Cutts is not one for predictions, but he is confident that the Shuttle fleet may double to four aircraft inside its first year. He also hopes to broaden the service to other points in the UAE - Sharjah, Ras Al Khaimah, Fujairah, Al Ain and Ruwais are mentioned - and perhaps venture into tourism with scheduled sight-seeing flights. For the moment, however, he is intent on proving the sceptics wrong.
Source: Airline Business
