Business Weekly - Cambridge, UK

Mango was established in 2004 by former Go and easyJet executives, yet in that short period of time has already landed major deals with Jetstar Asia in Singapore, Go Airlines in India and Silverjet, the new long haul, low fare airline based in Luton, which recently listed on the London Stock Exchange.

Mango was awarded the contract to set up Sama – a short haul carrier that covers Saudi Arabian destinations such as Riyadh, Jeddah, Gizan, Madinah and Dammam – by HRH Prince Bandar bin Khalid al Faisal, founder and chairman of the airline, after it was invited to submit a feasibility study in May 2005.

Culminating with Sama’s maiden flight from Dammam to Jeddah in March, Mango’s role included providing an interim management team, fundraising, gaining regulatory approval, acquiring aircraft and negotiating supplier contracts.

“We took this from a blank piece of paper to launching an airline; from taking on the market research through to applications of licences and putting planes in the sky,” said Michael Coltman, Mango director.

HRH Prince Bandar bin Khalid al Faisal, added: “Mango has been pivotal to the set-up and successful launch of Sama. Without Mango’s low fares expertise, we would have had much greater difficulty securing the necessary regulatory approvals, and achieving a successful launch.”

With over 27 million inhabitants, Saudi Arabia is the largest country in the Arab Gulf and a prime target for low fares travel. “It is probably the ripest market for low-cost carriers in the Middle East,” said Coltman.

“The average wage in Saudi Arabia is £12-13,000 per year. It is not like Kuwait where there are only around one million locals: Not everyone has an oil well.”

Mango advised Sama on its successful fund raising, leading investor presentations that eventually resulted in 30 private and institutional shareholders investing $50m to fund the airline’s launch.

The company led Sama through the regulatory approval process and the airline gained one of only two national air carrier licences to be awarded in Saudi Arabia.

It then assisted Sama in securing its launch fleet comprising four Boeing 737-300 on five-year lease terms and negotiated vital supplier contracts, including Sama’s award of aircraft maintenance services to SR Technics.

Sama now intends to grow its fleet by around 30 aircraft over the next five years, servicing other Saudi and Middle Eastern routes.

As well as an ability to oversee the founding of an airline from start to finish, this is Mango’s third major Asian contract and indicates an ability to adapt to big cultural differences. Coltman said: “Saudi Arabia is one of the few pure monopoly aviation markets.

“We had to adjust to how business is done there and needed to adjust to their cultural norms. Saudi Arabia has a rapidly growing economy, but it is entrenched in family patterns and you have to be aware of that.

“This added some time and complexity to the process.”

Coltman ended up living in Saudi Arabia for a year and a half, together with the company’s other founders – Andrew Cowen and Caroline Bell – and 20 associates who worked on the Sama project as required.

How much time Coltman would need to spend in Australia is yet to be seen as Mango is only in the preliminary stages of launching its new pilot training academy, aimed at meeting the demands of the thriving airline business.

“We are in discussions with Middle East and UK airlines about the cadet training. Australia is a good location because the costs are quite low, it has very good flying weather and the instructor quality is high.”

The academy is not expected to be ready before this time next year but within two years of launch, Mango hopes aims to have up to 100 cadets.