Tuesday, March 10, 2015

Kuwait Airways expansion outlined

Kuwait Airways has officially revealed a major expansion plan of its medium haul route network from June 2015 onwards as the carrier looks to increase aircraft utilization as well as expand with additional deliveries of new A320s in particular. The main highlights are as follows:

MUC - new 3 weekly nonstop flights effective 16JUL using an A343 with below schedule

Days 2/4/6

KU 173 Dep KWI 0745 Arr MUC 1255
KU 174 Dep MUC 1425 Arr KWI 2100
COK – frequencies increased from daily to double daily using an A320 for both flights with below schedule
KU 351 Dep KWI 2045 Arr COK 0430+1
KU 352 Dep COK 0550 Arr KWI 0815

KU 349 Dep KWI 2230 Arr COK 0615+1
KU 350 Dep COK 0715 Arr KWI 0940

IST - new daily nonstop flights effective 13JUL using an A320 with below schedule

KU 153 Dep KWI 2250 Arr IST 0310+1
KU 154 Dep IST 0415 Arr KWI 0800

BLR - new 3 weekly nonstop flights effective 01SEP using an A320

Days 2/4/7

KU 353 Dep KWI 2100 Arr BLR 0430+1
KU 354 Dep BLR 0530 Arr KWI 0755

AMD -  new 3 weekly nonstop flights effective 01SEP using an A320

Days 2/3/6

KU 345 Dep KWI 2245 Arr AMD 0505+1
KU 346 Dep AMD 0605 Arr KWI 0730

VIE - new 3 weekly nonstop flights effective 21JUL using an A320

Days 2/4/7

KU 177 Dep KWI 0120 Arr VIE 0605
KU 178 Dep VIE 1040 Arr KWI 1700


It is very pleasing to see KU once again growing its medium haul route network which has remained stagnant in terms of growth for over a decade now. However there are many concerns regarding the above expansion plan:

1. Munich has an O&D of 34,000 pax per annum with a majority flying in the summer. However like its competitors i.e. QR/EY/EK, KU too is a network carrier relying on more transit traffic out of Europe rather than O&D. Taking this into account, the schedule of KU 173/174 is guaranteed to fail because it only connects BKK + MNL in both directions via KWI and those flights are already full year round hence getting access to seats on BKK-MNL will be very tough. Operating a gas guzzling A343 too on a new route with such a schedule is also an extremely risky proposition due to the high operational costs involved.

2. The same applies to VIE which has an O&D demand of 16,000 pax per annum to/from KWI + sees summer seasonal demand primarily. The schedule for VIE too does not offer convenient connections via KWI in both directions to ANY destination on KU's network. Instead, KWI-VIE-KWI should be re-timed to be as below

KU 177 Dep KWI 0900 Arr VIE 1345
KU 178 Dep VIE 1440 Arr KWI 2100 

The above proposed schedule at least allows in both directions India, Pakistan and BKK/MNL/KUL/CGK to be connected in both directions via KWI thus capable of supplying additional feeder traffic.

3. KWI-IST though has a large O&D traffic demand year round i.e. 130,000 pax in 2014 but so does DXB/DOH/AUH/BAH in greater or equal numbers. None of these carriers including TK are dependent on O&D traffic mainly on this route and rely a lot on connecting traffic bound to Asia. KU's schedule for IST only connects DXB, BAH and JED in both directions via KWI in addition the timings proposed are very un-attractive for O&D traffic as with a 0300am arrival into IST it means an extra night's hotel needs to be paid for ! The main direct competition is TK four daily + daily Jazeera (SAW). Once again to ensure good year round S/F, the best schedule for KU at IST would have been below

KU 153 Dep KWI 0950 Arr IST 1410
KU 154 Dep IST 1510 Arr KWI 1855

If slots at IST for these timings cannot be secured then slots at SAW should be obtained. The above proposed schedule allows all of KU's Asia routes to be connected in both directions via KWI to Istanbul !

4. With regards to its India bound expansion to AMD and BLR, it has and does not have merit. To begin with, KU needs to first consolidate its India bound services especially on routes that it does not fly daily i.e. MAA + COK + TRV as these three routes see massive year round O&D demand to KWI + GCC

KWI-MAA - 240,000 pax
KWI-COK - 185,000 pax
KWI-TRV - 80,000 pax

KWI-MAA is flown by KU only four times per week nonstop using an A300-600R (AB6) which is a shock because it has higher O&D demand to KWI versus BOM + DEL ! The first thing that needs to be done is make MAA-KWI daily nonstop followed by COK and then consider expanding other services. BLR is a poor choice of a new Indian route as demand to GCC is not as high as CCJ nor HYD which should have been given higher preference! 

5. Frequency increase of KWI-COK flights from daily to double daily from April 2015 using an A320 though a good move, from a scheduling, sales and aircraft utilization perspective, it looks very weird as explained below:
KU 351 Dep KWI 2045 Arr COK 0430+1
KU 352 Dep COK 0550 Arr KWI 0815
KU 349 Dep KWI 2230 Arr COK 0615+1
KU 350 Dep COK 0715 Arr KWI 0940
You cannot have two KWI-COK-COK flights departing within 1:45 hours of each other as it is not a business route unlike KWI-DXB for example. This is purely a VFR/labor market segment route and in order to better utilize the A320, the schedule I would suggest is nicely spread out and more convenient for both O&D + transit traffic:

KU 351 Dep KWI 2045 Arr COK 0430+1
KU 352 Dep COK 0515 Arr KWI 0750
KU 349 Dep KWI 0845 Arr COK 1630
KU 350 Dep COK 1715 Arr KWI 1940
With my above proposed schedule, you can use one dedicated A320 to operate both KWI-COK-KWI on a daily basis each respectively. You have a nice spread of morning + evening departure timings as with the 0845 KWI departure it will allow KU in the future to create a new Indian subcontinent departure hub wave bank between 0830-1000. In addition, if KU has a spare A320 at night, it should instead look at either increasing KWI-MAA from 4 weekly to daily or launching new 4 weekly KWI-HYD nonstop flights as last year 60,000 passengers alone flew KWI-HYD-KWI + increase KWI-LHE-KWI from 3 to 5 weekly A320s.