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Rayyan Air PDF
Rayyan Air PDF
Ltd
Proposal for Cooperation 2009-2018
Proposal for Cooperation
Financial Workings 04
Implementation Modalities
05 To be discussed
06 Summary
FOREWORD
• In today’s rapidly changing geo-strategic situation, it is vital
that these bonds be further strengthened
• Expanding collaboration in important fields such as
aviation is a very necessary
• Saudi Arabia and Pakistan enjoy a
very special bilateral relationship
• Rayyan Air is honoured to offer the Concept of Cooperation and Sharing of Aviation Platform
• Alliances promote co-operation in a broad scale of commercial and operational areas
• An equity alliance would achieve an efficient cross-border merger
• Leading Airlines such as Delta (USA), HNA (China) and Etihaad (UAE) are following similar strategies
• This would support the international business expansion objectives of Saudi Investor / Aviation Company
• This strategic partnership will create an organization with enhanced capabilities and an unbeatable edge over current
Pakistani operators
• Would establish the direct presence of Saudi Arabia in a strategically important region
• This cooperation of Saudi Partner with Rayyan Air would create an AIR CARRIER (the CARRIER) that can:
o Access profitable routes and rapidly growing aviation markets, otherwise not possible, due regulations
o Reach the entire region, including Central Asia from Islamabad as a key hub
o Gain direct access to the booming Chinese market via Islamabad
• The Carrier shall reach international and domestic markets, in a high growth region
• The geographical location and Islamabad hub would maximize advantage to Rayyan Air, thus gaining significant edge over
other Saudi competitors Flynas, Saudi-Gulf, Al Maha Airways and even Saudia
01PART
COUNTRIES
SERVED
Pakistan
Nepal
Cambodia
Mongolia
India
Bangladesh
Ghana
Ethiopia
Jordan
Uruguay
Philippines
Haiti
Fiji
Rayyan Air Operations for
SOME DESTINATIONS
SERVED
Haiti: Port-Au Prince
East Timor: Dili
Sudan: El-Obeid
Khartoum
Nyala
El-
Fasher
Eritrea: Asmara
Asab
Sierra Leone: Freetown
Democratic Republic of Congo:
Kinshasa
Kisangani
Lumbumbashi
Kosovo: Pristina
Liberia: Monrovia
Ivory Coast:
Youmousokro
Abidjan
2010
RAYYAN AIR’s Contribution to the China-Pak Economic Corridor - 2010
• Since 2005, Rayyan Air was working on developing a detailed logistics plan
• With Kashgar as Hub, it was clear that Chinese products could reach worldwide markets, with better cost affectivity than
Urumqi or other western ports, currently in use
• The detailed plan was presented to Kashgar Prefecture Government on 26th July, 2009.
• The plan was accepted and support was assured to link Kashgar with Islamabad for assisting trade & economy of
Xinjiang province
• Rayyan Air operated the first Cargo flight on Dec 9, 2010 but suffered a loss of Rs20 million
2010
RAYYAN AIR MULTI-MODE LOGISTIC PLAN – 2011
•Rayyan Air operated the first proven Cargo flight on Dec 9, 2010 but with a loss of Rs20 million
•The effort was acknowledged and an official invitation was issued by Shenzhen Free Zone in May 2011
•China National Logistic Cell was given a presentation to explain how China could benefit by making Kashgar as the bridge head for
its exports to Western markets
•Six months later, Rayyan Air was offered support to implement it’s concept , commencing with Kashgar-Islamabad connection
as Phase-1
2011
GENESIS OF CPEC – (Multimodal Logistics) Conceptualized in 2005.
( Implemented in August 2013)
11/20/2018
2013
Suspension of Rayyan Air Operations
• Till April 2014, Rayyan air was successfully operating worldwide cargo operations as a leading regional charter carrier
• Rayyan Air contracted a project to transport commercial cargo from Moscow(Russia) to Damascus(Syria), while Syria was
under US sanctions. Though the US sanction did not apply to any non-US carrier, however, on strong objection of US, the
Pakistan Civil Aviation Authority (PCAA) suspended Rayyan Air operations
• During the suspension period, the company had to go through severe commercial and financial losses, due to premature
termination of lease of three (03) 747 aircraft
• The suspension was challenged in the courts of Pakistan and United States and Rayyan Air was honorably exonerated by
both the courts. Extract from judgment of Pakistan High Court is reproduced below:
“In view of hereinabove facts and circumstances of this case and the candid statement of the learned Standing Counsel and
representative of CAA, we are of the opinion that in the absence of any violation on Civil Aviation Laws or the terms of license
issued by the respondents in favour of petitioner, the impugned letter dated 28.3.2014 regarding suspension of charter
operations of M/s Rayyan Air (Pvt) Ltd., is without lawful authority which is hereby set aside.”
• Rayyan Air Clearance / Removal from Entity List of US Bureau of Industry & Security is reproduced below:
“This rule implements the decision of ERC to remove the following three entries from the entity list based on removal requests
received by the BIS: Numinen Oy, located in Finland; Rayyan Air, located in Pakistan, and AAG Makina
………………………………………………… Pakistan (1) Rayyan Air Pvt Ltd., House no 614 Street No 58 I-8/2 Islamabad Pakistan and Office
No 456, K street 57 I-8/3 Islamabad, Pakistan”
Current Status
Projects underway
and business plan
Growth Strategy of Rayyan Air
• Rayyan Air discontinued its B-747 Freighter operations in April 2015
• The company continued to conduct various aviation activities including regular charter services
• From August 2013 till March 2016, Rayyan Air operated regular air services between Islamabad and Kashgar, with A310 aircraft chartered
from PIA
• The Company is now poised to launch regular air services between Islamabad and Xi’an, with A320 aircraft chartered from PIA
• Rayyan Air expects to resume regular flights to Kashgar from both Islamabad and Karachi by March 2019, under an Agreement with the
Government of Kashgar, with A320 chartered from PIA
• Currently, efforts are underway to activate Charter and Airline Licenses of Rayyan Air
• The objective is to commence operations as a licensed air operator, in a pre-planned sequence
• Aircraft shall be inducted on lease to retain flexibility and minimize fleet build-up cost
• The phase-wise growth strategy shall ensure optimal use of resources and best utilization of assets
• Charter Operations shall be activated first and thereafter, regular airline operations under the RPT License of Rayyan Air shall be activated
• Umrah and Haj operations as well as other Charters to China shall be developed with own licenses
Phased Implementation of Rayyan Air Projects
• The Phased plan is to initially commence Charter operations, followed by Domestic RPT operations, and then
International RPT as a Low Cost Carrier
• Fleet planning is based on induction of leased narrow-body aircraft (A320 or 737-800)*
• The Rayyan Air business plan is depicted below:
Phased Implementation of Rayyan Air Projects
Phase-1 is centered on commencing flights between Islamabad and Kashgar, with aircraft chartered from PIA
START Immediately Charter A320 REGULAR CHARTER Flights to Xi’an • Frequency to be increased progressively from 2 flights per week upto 5 Total 3 year Project Returns – Two weekly Flights
from PIA flights per week • Projected Profit for 3 Years: $15 Million
With increased Cargo loads, one KHI-ISB-XIY • Increase to weekly The Rayyan Air strategy is to gain foothold in market
flight per week to be operated with • Subsidy Payments for 3 Years: $9 Million
XIY-ISB-KHI with low price tickets and extra facilities for Pax
Duration: PIA B777-200 • Financial security of the Project is ensured by guaranteed subsidy • Profit Sharing with Investor ____%
Initial 3 Years payments from Chinese Government
Extension +2 Yrs • This strategy has been successfully applied by Rayyan Air for over 3
Total 3 year Project Returns – Two -Five weekly Flights
years on Islamabad-Kashgar-Islamabad route
• With Ctrip and PIA booking System the flight will be accessible to all There is likely possibility to Incrementally increase the
• Xi’an is one of 13 emerging megacities of China and is the origin point of Number of flights as per our understanding with
both OBOR and CPEC
Chinese Government:
• The direct flight to Xi’an will greatly facilitate both Pakistani traders it
would also serve CPEC Personnel • Projected Profit for 3 Years: $ 36.26 Million
• Taking connections on PIA Gulf/Saudi network to ISB, Chinese working • Subsidy Payments for 3 Years: $ 19.14 Million
in Middle East will pay lowest price to reach Xi’an and Central China • Profit Sharing with Investor _____%
Phased Implementation of Rayyan Air Projects
Phase-2 is centered on activating own Charter License, induction of two aircraft and commencing Charter operations
• To enable rapid start up, the Rayyan Air strategy is to induct aircraft on wet lease initially
• Aircraft configuration: One class - All Economy
Phased Implementation of Rayyan Air Projects
Phase-3 is centered on activating own RPT License, induction of one more aircraft and commencing Domestic airline operations
• Rayyan Air strategy is to start Regular Public Transport (RPT) operations with limited flights on Karachi-Lahore and Karachi-Islamabad routes
• Priority to be given to utilize aircraft on more profitable Umrah and Haj flights
• Convert aircraft from Wet Lease to Dry Lease within 6 months (as applicable)
• Regulations allow International RPT operations after one year of successful domestic operations
Phased Implementation of Rayyan Air Projects
Phase-4 is centered on induction of two more aircraft and commencing International airline operations
Potential of Target
Market Segments
Phase-I
Regular Flights between
‘ISLAMABAD & XI’AN
Connecting Capitals: XI’AN and ISLAMABAD
• At present there is no direct air connection between these two key cities of CPEC
• Xi’an has ideal location -Track railway, high speed railway and express way which can
be linked to every major city in china intersect in Xian
• 2 hrs of high speed range covering 410 million people and 15.4 trillion of economy
• 2 hrs of air range covering 760 million people and 29 trillion of the economy
• This would facilitate rapid movement of CPEC project personnel
• Facilitate travel of students and business people and trade activities
• Track railway, high speed railway and express way which can be linked to every major
city in china intersect in Xian
Connecting Capitals: XI’AN and ISLAMABAD
• Only three cities of each country are inter-connected with total 17 flights per week
• 8 flights weekly from China and 9 flights by Pakistani Airlines – too less capacity for available traffic. Catered by other
carriers.
• Businessmen spend extra time and money to reach manufacturers in the Central region
Phase-III
Domestic RPT Operations
Phase-IV
International RPT Operations
WORLD AIR TRAFFIC TRENDS
INFOGRAPHICS
Growth and Change in Passenger journeys by Region
o ME/W. Asia leads Air traffic
577 m growth in the world
651 m 2.6 %
3.3 % o Global studies confirm steady
250 m
5.1 % traffic growth till 2034
In its forecast till 2034, IATA includes Pakistan in ‘the fastest growing markets’ and predicts annual
passenger growth % in Pakistan will be 7.5% compared with worldwide rate of 4.0%
Pakistan - Ideally Located at the Center of Highest Travel Growth
IATA STATISTICS
• The annual growth rate of domestic traffic in Pakistan
is 9.9%, whereas the worldwide rate is 3.8%
• Pakistan is flanked by the Middle East and Asia-
Pacific regions which have annual growth rates of
4.9%
Beijing-Islamabad:3,875
Islamabad-Beijing:3,875
Beijing-Dubai:(Beijing-Islamabad) + (Islamabad-Dubai)
Beijing-Dubai: 3875+ 1954 = 5826
Total Beijing-Islamabad-Beijing-Dubai:13576
Geo-Commercial location- Pakistan/China (North South Traffic)
Islamabad-Beijing:3,875
Beijing-Islamabad:3,875
Islamabad-Dubai: 1954
Total: Islamabad-Beijing-Islamabad-Dubai: 9704
LOCATION : Advantage of Islamabad/Lahore VS Middle East
• Hajj and Umrah is one of the vital sectors with huge growth potential that will create business potentials and job
opportunities;
(Thanks to Saudis diversification strategy to increase revenue to compensate falling oil prices.)
• Saudi Arabia has extended Umrah season by one month from 15th Ramadan to 15th Shawwal which is likely to
continue in future as well.
• Population in Muslim countries continues to grow.
• The Hajj and Umrah quota is being increased and expected to be nearly doubled – (Pakistani Religious Minister)
• Last year more then 6.5 Million Muslims performed Umrah from around the world.
• For Umrah and Hajj operators, the opportunities and potential shall continue to increase.
Hajj and Umrah
Data Assumptions
Aircraft 3 X A321 Aircrafts
Operations 35 Weeks Less Hajj
Umrah – Pakistan Origins 4 Stations – KHI,LHE,ISB,PEW
➢ As PIA and Airblue Charter GSA, Rayyan Air has provided the bridge for PIA and Airblue to access the lucrative UN
Logistics business
➢ To PIA : +$90 million
➢ To Air Blue: +$50 million
➢ Rayyan Air is the only company in this region providing Air Transportation support to UN Troops.
➢ Our in-depth knowledge of UN Operations is based on a comprehensive (13 year) Experience.
➢ Pioneered the Letter of Assist (LOA) Procedure: Conceptualized Working with UN Logistics and Pak Army to
introduce LOA in 1994 for the movements of Pak UN troops in Somalia, Bosnia & Herzegovina, Haiti and later East
Timor.
Ideal Location of Pakistan for Regional UN PEACEKEEPERS
Importance of Pakistan’s geo-strategic location
• Below are the countries where a Pakistani operator can exclusively exploit The Movements UN troops:
Bangladesh 7000 Expected Financial Benefits:
India 7600 ✓ Located very close to the a. Total UN peacekeepers: 101,709 (USD
Indonesia 2700 originating countries hence huge 582m)
Malaysia 876 reduction in positioning and de- b. Number of troops within Rayyan Air
Nepal 5200 positioning costs comparing the exclusive range: 33,026
Pakistan 7500 competitors. (USD 189m)
Republic of Korea 650 c. We can secure at least 50% of these troops
✓ The Proposed Airbus 321 ideally
Sri Lanka 500 16,500
Philippines 150
suits the transportation due to its
(USD 95m)
Cambodia 850 comparatively more volumetric
cargo space and optimal range d. Average profit: 15% of USD 95m
TOTAL 33026
USD 14.25m
factor.
UN PEACEKEEPERS: The Current Scenario
• Total uniformed personnel to be transported by UN air chartered services in 2017/18 is approximate :
➢ Troops: 89,098
➢ Police: 12,611
➢ Total: 101,709
• These are mostly deployed in African countries, Haiti, Cyprus and Levant states (Lebanon, Syria, and
Israel)
• Below are the countries where a Pakistani operator can exclusively exploit The Movements UN troops:
Bangladesh 7000
✓ Located very close to the Expected Financial Benefits:
India 7600
originating countries hence huge a. Total UN peacekeepers : 101,709
Indonesia 2700
Malaysia 876 reduction in positioning and de- b. Number of troops within Rayyan Air
Nepal 5200 positioning costs comparing the exclusive range : 33026 = 32.47%
Pakistan 7500 competitors. c. Revenue Percentage = 32.47 % of 582
Million = UD $189 Million
Republic of Korea 650
✓ The Proposed Airbus 321 ideally
Sri Lanka 500 d. Average profit = 15% of 189 Million =
suits the transportation due to its
Philippines 150
comparatively more volumetric US $28.35 Million
Cambodia 850
TOTAL 33026
cargo space and optimal range
factor.
UN Logistics
Operations
Regular Schedule Airline Operations
• With three aircrafts on its AOC, the airline is entitled to carry out schedule operations (RPT-Regular Public
Transport)
• Rayyan Air can start its local operations on limited basis between major trunk routes, that is Karachi-Lahore and
Karachi-Islamabad
• After one year successful domestic operations, Rayyan Air would be entitled to operate international scheduled
operations, besides new international routes, it will help airline to increase its revenue on Umrah flights.
04 PART
Conclusions
The Need for Airline Co-operation
• Today’s competitive market environment makes it difficult for any company to survive without
partners
• Even the biggest airlines are entering into strategic airline alliances with their competitors
• Alliances promote co-operation in a broad scale of commercial and operational areas
• With further interaction, concurrence on ways and means to move forward to achieve a
1
feasible and mutually beneficial venture would be possible.
PROSPECTS FOR COLLOBORATION
▪ Rayyan Air is a reliable partner with record of commitment and deliverance
▪ Rayyan welcomes the SAUDI GROUP to jointly evaluate the Airline project
▪ The project offers numerous potential benefits for the SAUDI GROUP
▪ With firm commitment and decisive actions, the first flight could be anticipated within 4-6 months
▪ The goal of Rayyan Air to deliver safety and better quality at an affordable price would guarantee success
CONCLUSION
Modalities for future cooperation can be drawn up after further discussions
The parameters for a mutually beneficial Business relationship can be drafted, to include:
o MOU for Commitment
o Detailed Agreements defining Scope and Minimum duration for engagement
o Estimation of Equity & Technical Needs
o Profit sharing formulae
o Funding, fleet plan and routes
o Due Institutional Processes
o Description of Management Structure - Decision making
o Organogram / Staffing
RAYYAN AIR IS POISED FOR ‘FAST
TRACK’ LAUNCH OF CHARTER AND
RPT OPERATIONS
THE SAUDI INVESTMENT MANAGEMENT MAY
LIKE TO EVALUATE THIS PROPOSAL
Proposal for Cooperation
Financial Workings
Analysis of the Opportunity Market Share Expectations
Implementation Modalities
Thank you