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in Air Transport / Features

Why this island should be mainstream

Posted 1 November 2016 · Add Comment

Qeshm Air chief executive, Mahmoud Shekarabi, talks to Martin Rivers about his efforts to promote charter tourism to the Gulf island – until recently home to a UNESCO World Heritage Site.

 

Qeshm Island, like its smaller but better-known neighbour Kish Island, doesn’t feature in the travel bucket-lists of many international tourists.
Of the 397,000 people who flew to the island in the Strait of Hormuz last year, three quarters were Iranian nationals.
Qeshm’s Dayrestan Airport ranks as only the 13th largest gateway in Iran by aircraft movements, despite being the main entry point for one of the country’s much-touted free-trade zones. No foreign carriers fly there on a regular basis.
“Our customers are Iranian tourists mostly,” confirmed Mahmoud Shekarabi, chief executive of Qeshm Air, the airline that provides two-thirds of seating capacity at the island. “Due to the sanctions, there were some problems for businessmen to fly here [in the past].
“But I believe there’s going to be changes. Before, there was tourism and just maybe some students. Now it’s going to be businessmen, students, tourists, families.”
Qeshm Air currently operates to 19 domestic and 14 international destinations, including three points in Turkey and seasonal charter services to southern and eastern Europe. Its only long-haul destination is the Thai capital, Bangkok.
The airline has 13 operational aircraft: two Airbus A320s, three A300-600s, three BAe RJ100s, one RJ85 and four Fokker 100s. Another eight aircraft are held in storage, including four Fokker 50s that are in the process of being sold.
Only “two or three” of the carrier’s active aircraft are based in Qeshm, with the majority put to work plying domestic routes elsewhere in the Islamic Republic.
Asked about opportunities for expansion following the lifting of Iran’s nuclear-related sanctions, Shekarabi can hardly contain his excitement.
The chief executive has already pledged to add or expand flights from four domestic points – Isfahan, Gorgan, Tabriz and Kermanshah – as well as bringing Muscat, Oman into the network. The airline’s regional Middle Eastern footprint currently only extends to Dubai in the United Arab Emirates and Baghdad and Najaf in Iraq.
But far more ambitious growth lies on the horizon, with management aiming to grow the fleet by more than 50% this year alone.
“We are trying to lease or lease-purchase at least three A320s rapidly, maybe within two or three months,” Shekarabi said in late January. “And then after that, by the beginning of May or June, we will go for long-range aircraft like the A330. By the end of the year we are trying to increase our fleet to 20 aircraft.”
Second-hand narrow-bodies between six and eight years of age will be targeted, he added, with long-term leases running for about a decade. The “next phase of the project” will then involve placing direct orders for new-build aircraft.
“We have to see what’s going on in the market first, in order [that] we don’t put a lot of liability on our company,” Shekarabi said of the staggered renewal process.
The pace at which Qeshm Air receives the new Airbuses will also determine how quickly its older types are phased out.
“We are trying to get rid of the Fokker 50s [right now] and then the RJs [will be next to go],” the chief executive confirmed. “The Fokker 50s are grounded in order that we may sell them. The RJs may be grounded, but it depends on what kind of aircraft we get after the lifting of sanctions.”
If all goes according to plan, foreign charter traffic to Qeshm Island should be a key driver of the expansion programme.
Today, most of Qeshm Air’s flights are operated on a scheduled basis from Tehran Mehrabad International Airport and Tehran Imam Khomeini International Airport. Iran’s capital city accounts for seven times as many seats as Qeshm Island when looking at the airline’s existing scheduled operations.
“Only 20-25% of our flights are charter,” Shekarabi said, referring to the group bookings favoured by many holidaymakers. “I am sure this percentage will rise. We don’t operate as a tour company – we are a pure airline business – but we will offer [our aircraft] as charter.”
In April, the Qeshm Free Trade Zone Organisation (QFTZO) hosted a consortium representing five countries – Russia, France, China, Italy and Germany – that is working to raise the island’s overseas profile. The authorities hope to entice 100,000 foreign visitors a year by promoting its eco-tourism attractions, including its world-class caves, mangrove forests and reef formations.
Restoring UNESCO World Heritage status for the Qeshm Island Global Geopark – a 30,000-hectare site comprising many of the island’s most impressive sights – is one priority. The park was removed from the UN list in 2013 due to alleged mismanagement by the authorities.
Qeshm Air, meanwhile, plans to diversify operations by increasing charter flights for pilgrims in the northern city of Mashhad.
But it is Qeshm Island itself that remains the focal point of Shekarabi’s efforts, with optimism also growing about its corporate prospects after Russia’s Tempbank pledged to open a branch on the island.
Whether tourists or business travellers ultimately drive the growth, Qeshm Air is re-positioning its on-board product to cater for higher-yielding clientele. Retrofitting its Airbuses with premium cabins – absent on all but one of the existing units, an A300 – will be the first step.
“Most of our aircraft are all-economy, so we may now go for business class,” Shekarabi said, confirming that upgrades are being sought for both A320s plus the two A300s that lack premium seats.
Two-class cabins will also be a staple feature of the airline’s upcoming deliveries.
Asked how Qeshm Air plans to finance its expansion, the airline boss sounded an upbeat note about the willingness of foreign banks to lend assistance – despite uncertainty about Iran’s legal landscape; lingering financial restrictions; and even the risk of snap-back sanctions.
“Nobody around the world buys aircraft with cash. We are the same. So we are looking for the financing [deals],” he said. “We have some financers internally [in Iran], but we prefer to get it from the outside.”
Initial overtures to foreign banks have already prompted “enthusiastic” responses, he added, while declining to name the institutions or countries involved.
Last year, Turkish media outlets reported that the National Iranian Oil Company, a state-owned body, had seized Qeshm Air from its former owner, Babak Zanjani, after he became embroiled in a corruption scandal. A five-star hotel on the island that was owned by Zanjani was also confiscated, and in March the billionaire was sentenced to death for embezzlement.
“Mr Zanjani was the first owner of the company, but he had some debts with the government, I believe, so they had to take [the airline] over as his debt,” Shekarabi said, without providing further details.
“We don't have any business with him now. The company has been transferred [back] to the private sector. It is 100% private.”
Following a spate of disputes between Qeshm Air and the national government, and between the QFTZO and global environmental bodies, Shekarabi is working to put the island back on the map for entirely positive reasons.
If he succeeds, Qeshm could yet make an appearance in the travel bucket-lists of foreign tourists eager to discover Persia’s forgotten charms.

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