UAE's RAK Airways to restart flights Oct, no IPO plans

UAE’s RAK Airways to restart flights Oct, no IPO plans

To consider aircraft buys after one year; Says hopes to break even in the first year; Fares to be as low as $2.72.

September 26, 2010 12:46 by Reuters

United Arab Emirates’ RAK Airways said on Sunday it will restart flights on Oct. 10, after halting services in 2009, and will consider aircraft buys after a year, ruling out plans for an initial public offering at present. RAK Airways, the national carrier for the UAE’s most northern emirate Ras Al Khaimah, had suspended operations in May 2009 due to tough economic conditions in the wake of the global financial crisis.

“We have an attractive business plan. We hope to break even in the first year,” its Chief Executive Omar Jahameh told reporters on the sidelines of the re-launch event.

There is no change in the company’s ownership, predominantly comprising of private shareholders, he added.

“Going to IPO is not an option at the moment,” he said.

The airline said it will restart with flights to Jeddah in Saudi Arabia and Calicut in India deploying two 737-400 Boeing aircraft, with airfares to sell as little as 10 dirhams ($2.72). The airline will revisit the option to purchase four Boeing 737-800 aircraft with the manufacturer in a year’s time.

“The contract is not final. We have a very good relationship with Boeing and this contract is very flexible,” Chairman Sheikh Omar bin Saqr al-Qassimi told reporters.

“After one year (will be the right time to revisit),” he added.

RAK Airways began operations in 2007 but had limited itself to charter services last year.

(Reporting by Praveen Menon; Writing by Tamara Walid; Editing by Jason Benham)