• Economies globally are not at their best, especially in China, Europe and the US
• Consumer spend is at its highest level, giving a positive indication of being optimistic
• We ensure that traveling in air is affordable for each and every citizen of Kuwait
Q: What is the economic situation in the Gulf, more specifically in the Kuwait, and how is it impacting your business?
A: In the past three years, we had geopolitical issues in the Gulf and at the same time very complex situations due to the drop in oil prices. But that has not been the case for many years in teh past. Even if we had issues geopolitically, the region was booming economically. However, in the last three years, there have been both, let’s say, a kind of double impact in our region.
However, going forward, we are hopefully looking for better 2017, with oil prices going in the right direction. We are expecting them to stabilize and it will reflect positively in the Gulf region.
Q: What is your estimate regarding the oil prices? It should go up to what level, where you will feel comfortable about the economy?
A: On one hand, being in the airline business, I would say the lower the price, the better the situation. On the other hand, we enjoy the increase of the prices, because that would mean more government spend in the Gulf and it will ensure better performance of the overall economy. But setting the oil price, it’s something that is not my expertise and I don’t think anybody can judge or put a price on it. However, the range that is going right now seems reasonable and we hope that we will see a gradual pick-up rather than sharp steps up, because if it goes up fast, it will come down sharply as well. Therefore price stability is what is really needed in our market.
Q: But what would drive the prices up? The Chinese economy is still more or less where it was last year. We are also not sure about the US. So where do you think the demand will come from?
A: You have seen it at WEF-Davos that economies globally are not at their best, especially in China, Europe and the US. They are still not at their brightest levels. And as we all know that oil is a commodity and cartels can only really dictate the prices. So the only way going forward to balance the prices or let’s say stabilize the prices of oil is by controlling the production. The demand is dropping; we have to make sure that there is no oversupply in the market. That’s the only way, which could help in stabilizing the prices.
Q: How is the political situation in your home country, in Kuwait? And how is it impacting the business ecosystem?
A: Well, Kuwait is always a very interesting market within the region. We enjoy democracy and we enjoy free speech in the media. It’s not something that has come overnight but this has evolved over the years. This enriches our society; all those debates and discussions in the country ultimately add value to the development of the nation. Now Kuwait is standing in a good position, with various ambitious plans related to infrastructure projects and government investments. They projects are not in the planning stage, but have been signed off and are in the process of execution. No single project was cancelled, which is very important to give the confidence to the market. Consumer spend is also at its highest level, so that gives us a good, positive indication of being optimistic, both economically and politically. Because of the political stabilization that we have in Kuwait, we are expecting 2017 and the upcoming years to be very bright.
Q: You are operating one of the few airlines in the region, which is private, and hence it’s not subsidized. How has it been competing with very large players in your neighborhood?
A: We are competing with governments, so our peers are basically government-run. They control the airports, they control the fuel, they control everything like immigration, and you name it and so on. However, we have established a brand that is really liked by the public, by the masses. We are satisfying them and giving them real value for their money. And since we established 10 years ago in Kuwait, we did not provide just the service but we also ensured that traveling in air is affordable for each and every citizen or resident in Kuwait. This is the strategy that helped us to expand in the market.
Q: What is the current fleet size and how many passengers do you carry every year?
A: We are a conservative airline and today we operate with seven aircraft. We want to make our stakeholders richer, not Boeing or Airbus. We never place bets on aircraft or large orders, to the contrary, we sold our entire fleet last year and re-leased our requirements to relieve ourselves from any exposure with currencies and I think that our point was proved correct with the shock decrease in the value of the dollar. We have mitigated that risk because all our income is based on local currencies in the Gulf, especially in Kuwait, and we have seen the gap widening between the dollar and the local currency. We carry about one and quarter million (passengers) that are about one third the population of Kuwait, which is really the right size to operate, because our focus is on the regional network.
Q: Are you profitable?
A: Yes. Jazeera is a listed company and you can have a look at it at the Kuwait Stock Exchange. You will notice that having the private sector to participate in businesses and services would relieve the burden from the government’s shoulders. But with time we hope and we would like to see that all airlines in the GCC are in the hands of the private sector.
Q: You also control one of the businesses that is very unusual for private sector – media. What are the challenges that you see for this segment of business?
A: The challenges are immense when it comes to the media. Again states and governments are in the media business, especially in the Gulf, so it’s a kind of love and hate situation in a way. On one side, yes, we all need the support of the government to ensure that are able to enhance the medium of the media in the region. On the other hand, they are the competitors. But we have been working along for many, many years.