#Lebanon welcomes new low cost #airline in turbulent times
Low cost airlines are born out of various reasons. In the Middle East, political turmoil has affected all airlines operating to the region. Travel and tourism are connected by delicate strings to the geopolitical scenario and from such a strife a new LCC is about to emerge.
In the past few months, civil and political unrest have disrupted economies in the Middle East. In an attempt to contain the violence, countries are forced to seal their borders, causing a disruption in the global economic network. In a similar manner, the unrest in Syria has affected the travel and tourism industry between Jordan and Lebanon. Although travel is expected to have declined in the holy month of Ramadan, authorities are of the opinion that the Syrian strife has also weighed down the traffic.
The most popular means of transport between Lebanon and Jordan is by road via Syria with 60% of visitors to Jordan take the aforementioned route, according to president of the hotels association Pierre Ashkar.
To save the tourist season and travel industry after the holy month of Ramadan, Lebanese officials are planning to set up a low cost charter flights between Beirut and Amman. Subject to airports in Jordan and Lebanon providing travellers with 50% discount on taxes as per their agreement, the airline fare can come down to as low as $10 per ticket compared with the present fare of $60 a ticket.
In view of the previous quarter results for airlines all over the world, IATA data show that Middle Eastern carriers have been falling behind carriers from the rest of the world. The booming LCC market is packed with cutthroat competition, which raises doubts about whether the Beirut-Amman low cost charter airline would survive the scenario during the crisis and after peace is restored.
However there is a ray of hope; Air Arabia has posted a 2% increase in net profit, proving the resilience of the LCC “to the dynamic market condition”. The launch of more LCCs in the Middle Eastern region might bring up the profitability of the region, provided they follow a strict fuel hedging policy. The Beirut-Amman route is an opening to a lot more than just a survival strategy from ongoing geopolitical turmoil, but also a profit gaining venture.
To know more about the strategies of low cost airlines visit Low Cost Airlines Congress 2011.
