Flynas looking to renegotiate deal for 20 Airbus Group NV short-haul aircraft

Chief executive officer Raja Azmi said. “We’ll have to start talking soon because nothing is available before 2020 at the earliest. It’s possible we will swap A320-classic orders for the re-engined and more fuel efficient Neo model.” 

Analyst Saj Ahmad commented: “flynas' ambition to leverage low cost style operations into a long haul model carries significant risk. While leasing A330s is a smart move since they can simply hand the planes back if the plans do not work, they will need to look very closely at airlines like AirAsia X who have struggled to make the low cost long haul model work. 

“At the end of February 2014, AirAsia X reported a huge loss of RM110m along with a whopping 15% decline in yields. 

“Factor in the higher fuel costs of the older A330 against current fuel prices and oil cost escalation, flynas' desire to achieve low cost long haul success will not only test their managerial prowess but also their financial discipline. In terms of the GCC, it is still a bit-part player with just 23 destinations under its belt compared to Air Arabia's 89 destinations and flydubai's 68.” 

Ahmad added: “Moving to secure A320neo slots is a good move for flynas since neither of its A320 operating rivals in Jazeera Airways or Air Arabia have yet done so - but its endeavours for the widebody market leave a lot of questions to be answered as to why they think their strategy for the long haul will work when they aren't even the biggest in the GCC for low cost travel today. Is this another case of wishful thinking? On the surface at least, that's exactly what it appears to be.”