Business / Global
Making fast food and even faster bucks in the Middle East, plus Russia's new low-cost carrier.
Ticketing hassles, rusty Tupolev aeroplanes, obnoxious staff and ludicrous fares could soon all be a distant memory of flying internally in Russia. All hail the launch of the country’s first budget carrier, Sky Express.
In May, the company will start flights from Moscow to Volgograd, Ekaterinburg and Tyumen. These take Sky Express’s destinations to seven, including the Baltic enclave of Kaliningrad and the route between Moscow’s Vnukovo Airport and the Black Sea resort of Sochi that launched on 29 January.
Using leased Boeing 737s, the company aims to fly to 20 destinations within Russia by the end of the year. Most of these will be cities within 2,000km of Moscow: short hops by Russian standards but an affordable alternative to tedious train trips of 24 hours or more.
Investors in the €52.5m project include the European Bank for Reconstruction and Development, with a €7.5m stake, and Boris Abramovich (no relation to Roman), the CEO of KrasAir, Russia’s fourth largest airline.
The business model is based on European budget carriers, with online payments, e-tickets, fast airport turnaround times, low crew to passenger ratios and a reduced on-board service. Given Aeroflot’s reputation for less than stellar service, passengers will be happy that they’re not flying on a clapped out plane.
On paper it should be a success given Russia’s growing middle class and the vast distances between destinations. As always in Russia, however, it pays to wait and see – trumped up “legal problems” or one nasty crash, and the outlook might not seem so rosy. But with Abramovich on board, the company has a powerful backer to deal with any possible problems, and on most routes the lowest fares are cheaper than even the most miserable class of rail ticket.
In the past, a Lebanese with get up and go usually got up and went west. Brazil, America, Australia and the Côte d’Ivoire all benefited from Lebanon’s many migrations. These days opportunities closer to home lure those weary of Lebanon’s unpredictable politics. Dubai, Kuwait, Saudi Arabia, Qatar and Bahrain all have growing Lebanese populations. Today’s twist is that Lebanese entrepreneurs are heading abroad not to seek exile but to expand.
Leading the flight are Lebanese food franchises that offer full meals (Café Blanc and Burj El Hamam), snack foods like shawarma (Kababji) and the pizza-style mankoushe (Zaatar W Zeit), as well as international diner-style fare (Casper & Gambini, Roadster, Crepaway), coffee (La Maison du Café), and even fresh juices (Waterlemon).
For the past four years, the prime destination for Lebanese franchises has been the Gulf, principally Kuwait, Saudi Arabia, Qatar and Dubai. Most are more profitable abroad than they are at home and increasingly regard their local branches as statements of faith in Lebanon rather than investments.
As the economy at home has stagnated following the July 2006 war with Israel and with a confrontation still looming with Hezbollah, overseas expansion plans have been speeded up. Zaatar W Zeit plans 21 Gulf outlets in the next four years, Café Blanc and Waterlemon open five more outlets each this year and C&G, which added six new locations last year, plans to create six more this year.
Their boom is due to a combination of factors. Flush with oil money, Gulf investors are eager to find new projects to back. Lebanese food outlets appeal because returns are fast and almost guaranteed: their general emphasis on décor means the franchises look and feel more like restaurants, which appeals to Arab sensibilities, and the food tastes more familiar than other processed fast food.
As the Gulf develops, some are looking elsewhere. C&G and Crepaway have moved into Jordan and Egypt, and Kababji has opened in Sudan. Catering to Lebanese/Arab population centres in Europe and the Americas seems a sensible and, as the global financial gravity shifts eastwards, so does Asia.
Is it a car, is it a plane?
A small start-up outside Boston plans to give new meaning to the term “fly drive”. Terrafugia (from the Latin for “escape from the earth”) is preparing to build the first prototype of its Transition vehicle – a light sport plane that can fold up its wings to become a car. The company has just raised its first million dollars in angel funding.
The two-seater will not ship until 2009, but there’s already a waiting list. More than a dozen customers have put down a $7,400 (€5,550) deposit toward the purchase price of $148,000 (€111,000). That’s a fraction of what another developer, California-based Moller, will charge for its Skycar – a vehicle capable of vertical take-off and landing – that is also under development and set to cost closer to $1m (€750,000).
The Transition features a 100 HP engine that can go up to 85 miles per hour on the road and travel at 120 knots when airborne. With a fuel tank of 20 gallons, it should have a range of up to 500 miles, says Terrafugia’s chief engineer Samuel Schweighart.
The hybrid craft has to master some serious potholes and air pockets, plus a crash test. The company hopes to have the design finalised by the middle of next year to submit it to the Federal Aviation Administration (FAA) for certification. And yes, the craft will fit into a standard parking spot.