A roadmap to the up-and-coming low-cost carriers
Despite the devastating effects of the COVID-19 pandemic, the aviation industry has witnessed a boom in start-up airlines. New carriers took advantage of favorable conditions during the pandemic by buying new aircraft at cheaper rates and securing slots on empty routes.
But what can we expect from the up-and-coming budget airlines? Here, AeroTime examines the low-cost carriers (LCCs) due to launch in 2022.
Akasa Air is the latest addition to India’s aviation sector. The airline is an ultra-low-cost carrier backed by Indian billionaire Rakesh Jhunjhunwala and was founded in 2021.
The start-up company will be operating a fleet of Boeing 737 MAX, having announced a hefty order for 72 of the aircraft at the Dubai Airshow in November 2021. The order comprises the 737 MAX 8 and the higher capacity 737 MAX 8200 aircraft. The airline expects to reach its fleet size of 72 aircraft in five years.
“We believe that the new 737 MAX airplane will support our aim of running not just a cost-efficient, reliable and affordable airline, but also an environmentally friendly company with the youngest and greenest fleet in the Indian skies," Akasa Air CEO Vinay Dube said in a statement dated November 2021. Dube is the former chief executive of Jet Airways.
To power the fleet of Boeing 737 MAX, Akasa has picked CFM International LEAP-1B engines. The deal also included spare engines and a long-term services agreement valued at $4.5 billion at list price.
The airline has already finalized its reservation and booking systems provider. Akasa Air has chosen the cloud enabled Navitaire Airline Platform to power its digital retailing strategy.
However, India’s newest airline still needs to obtain an air operator’s certificate (AOC) from the Directorate General of Civil Aviation (DGCA). The new carrier plans to offer commercial flights starting in mid-summer 2022 to support the growing demand across India.
Once in the skies, Akasa Air will compete with India’s well-established LCCs such as IndiGo, SpiceJet, and GoAir.
It has been more than 30 years since the first Australian low-cost carrier (LCC) entered the local airline market. Now, backed by Miami-based private investment company 777 Partners, Bonza is set to become the latest addition to Australia’s low-cost carrier market.
The start-up was founded in 2021 by Tim Jordan, a former administrator of Virgin Australia’s low-cost ancestor, Virgin Blue. The airline expects to launch operations in September 2022.
Bonza has picked Boeing airplanes for its future operations. The airline’s initial fleet is expected to consist of up to three Boeing 737 MAX 8 jets, capable of accommodating 186 passengers. However, the airline has plans to grow its fleet once it is established in the sector.
In early December 2021, Boeing confirmed that 777 Partners ordered an additional 30 737 MAX jets, bringing its commercial aircraft portfolio to a total of 68 aircraft of this type.
Bonza plans to operate 25 routes across 17 destinations.
Bonza will become the first new Australian start-up airline since Tiger Airways Australia, a former subsidiary of Virgin Australia Holdings, ceased operations in March 2020 as a result of the COVID-19 pandemic.
Even before it launched, this low-cost airline from the Dominican Republic had opted to rebrand. Initially branded Flycana, it has renamed itself Arajet.
Arajet seems to have spotted a gap in the low-cost carrier market across the region. The airline says that the Dominican Republican and the wider Caribbean region are underserved by low-cost airlines.
The start-up airline will be led by Victor Pacheco and Mike Powell, the latter being the former chief financial officer of Wizz Air. Arajet is supported financially by aviation investors Bain Capital Special Situations and Griffin Global Asset Management. The airline is also backed by the Dominican Government and Vinci Airports.
Dominican Republic-based Arajet will expand its fleet by adding 20 Boeing 737 MAX 8 aircraft. In addition, the new ultra-low-cost carrier has options to purchase a further 15 Boeing 737 MAXs, which “along with existing lease agreements, could take the airline's new fuel-efficient fleet to 40 airplanes”.
Arajet is expected to launch operations from Las Americas International Airport (SDQ) with flights to the Caribbean islands and Central America starting in spring 2022. The carrier also plans to add flights to key North American destinations, including New York, Boston, Miami, and Chicago.
To start operations, the airline has one aircraft in its fleet. The airline’s first Boeing 737 MAX 8, registered HI1026, was leased from Griffin Global Asset Management and arrived in early March 2022.
“We believe Arajet is well-positioned to transform the Santo Domingo Airport into a modern, new hub for destination and connecting traffic,” Victor Pacheco, founder and CEO of Arajet, said in a press release dated March 14, 2022.
Arajet also claims to be the first to adopt a ULCC business model in the Caribbean market.
Greater Bay Airlines
While Greater Bay Airlines is not considered to be a low-cost carrier, it is worth mentioning this new airline because it positions itself as a so-called ‘value carrier’ - an airline that sits between being a traditional and a low-cost carrier.
Backed by Bill Wong Cho-bau (known as Huang Chubiao in mainland China), Hong Kong’s eighth carrier had hoped to launch commercial operations in summer 2021. However, due to the travel restrictions resulting from the COVID-19 pandemic, Greater Bay Airlines has pushed its launch date multiple times.
The new airline in Hong Kong has been cleared to operate to 104 destinations at unlimited frequencies from and to Hong Kong International Airport (HKG) until February 20, 2027. The carrier plans to operate flights from Hong Kong to mainland China, North Asia and Southeast Asian destinations.
The airline currently has a fleet of two Boeing 737-800 aircraft. On March 15, 2022, Greater Bay Airlines received its second Boeing 737-800, registered as B-KBJ. Initially, Greater Bay Airlines intended to have seven 737-800s in service by the end of 2022 and more than 30 by 2026. However, according to a Reuters report, a difficult COVID-19 situation in Hong Kong has slowed the airline’s growth plans. Now, the carrier expects three 737s to operate by the end of 2022.
According to a Bloomberg report, the airline is reportedly in talks with both Airbus and Boeing to purchase at least 30 narrow-body aircraft valued at $1.8 billion. Hong Kong’s newest airline is currently deciding between the Airbus A321neos and the Boeing 737 MAX 10 jets.
Greater Bay Airlines has already been cleared to formally launch scheduled commercial operations.
While not exactly a start-up, Canada Jetlines (JETMF) is another ultra-low-cost carrier which is expected to launch scheduled operations in summer 2022.
Canada Jetlines (JETMF) was founded in 2013. Since then, the carrier has experienced near-constant management changes and has struggled to launch operations. Historically, the airline was created to provide ultra-low-cost services to destinations in the United States, the Caribbean, and Mexico.
Having selected Airbus A320 aircraft as its fleet standard, the airline currently has just one Airbus A320 jet. However, according to the official Canada Jetlines (JETMF) website, the carrier hopes to expand its fleet to 15 Airbus family planes by 2025.
Canada Jetlines (JETMF) is still waiting for its air operator’s certificate (AOC).
Once launched, the new airline will compete with other budget airlines in Canada including Sunwing Airlines, Flair Airlines, Air Canada Rouge, Porter Airlines, Swoop Airlines, and recently launched Lynx Air.
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