Australian company bases its business on flight delays

©Gulf News

Dubai: Now may not be the ideal time for any business that has airlines as clients to expand into new territories. But for Australia’s Flight Disruptions, it’s very much in for the long-haul.

The company helps airlines manage delays in flight departures, by making hotel and other arrangements for the affected passengers and crew members. It then sends a full shift report to the airline the next day.

But now, with airlines still far from reaching full operational capacity, there aren’t that many delays creeping into services. And without delays, there’s less chance to call in Flight Disruptions.

They will return

That hasn’t stopped the company’s launch in the UAE - “The services are ready to go - it’s just a matter of volume as airlines return back to scheduled operations,” said Greg Shaw, founder and Managing Director.

El Al makes a call

The Israeli flag carrier, which this week announced 14 weekly services to Dubai from next month, has initiated communications. “We’ve got a couple of emails back - but what would be really good is when it starts to operate in the region,” said Shaw. “Then, obviously, we would be able to support them as well.”

Until then, Flight Disruptions is reaching out to airlines that have been long-time customers. “We have had a really good hookup with Philippine Airlines - they were our customer here in Australia, and they’ve given us all of the airport manager contacts in the GCC,” said Shaw.

“Some Chinese airlines have said they’re interested in us doing their hotels and transport when they resume flying.”

Solving a legacy issue

At the heart of FD’s business model is an age-old problem faced by airlines. “The reality is that airlines do everything in their power to avoid delays and cancellations because cost to the airline is much higher than what they have to pay passengers,” said Jim Callaghan, CEO of One Sky Solutions, which recently signed an agreement with FD.

Airlines have been bleeding cash due to EU Regulation 261, which calls for the establishment of common rules on compensation to passengers in the event of a denied boarding, flight cancellations, or long delays.

According to an EU report, the total cost of the regulation was 5.3 billion euros in 2018. The report also estimated an additional 100 million euro to 500 million euro in administration costs for airlines.

“Emirates, Etihad, Gulf Air and all airlines that fly into Europe, as well as airlines that fly into the UAE and the region, have been affected by the costs involved to comply with EU261,” said Callaghan.

Alliance

In the UAE, Flight Disruptions has found an ally in Marwan Al Sarkal, executive chairman of Sharjah Investment and Development Authority (Shurooq), who is the company’s business partner.

“I don’t think that we could have found anyone better than Marwan - he’s very well-connected, he knows the industry,” said Shaw. “He may not have hands-on experience within aviation, but in terms of business he’s quite influential.”

Flight Disruptions has plans to expand its operations in the whole of the GCC. “With our base there, our plans are to keep expanding and recruiting,” said Shaw. “We want to be out servicing in Muscat, Bahrain, Doha and all of Saudi Arabia.”

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