In April we wrote about FlyBosnia as our Airline Startup of the Week. FlyBosnia has now been flying scheduled flights for a month to Riyadh, Kuwait, Gassim and Jeddah. The airline announced more routes to the Middle East and Europe, which will follow with the arrival of six new A319 aircraft over the next three years.

At first FlyBosnia had some teething troubles. The website was not functional until just before the first flight took off. Some announced routes never materialised. But, in June the airline finally took off after almost two years of preparation.

FlyBosnia is now set to become a successful regional airline. One reason for this is the strong financial backing the airline receives from its parent company, with a local portfolio of sibling businesses. But the most important reason why FlyBosnia is heading for success comes down to religious tourism.

FlyBosnia success through Halal tourism

Bosnia and Herzegovina is one of only six European countries in which more than half of the population identifies as Muslim. At the same time, it is one of Europe's most friendly tourist destinations. It ranked eighth in a World Economic Forum Competitiveness Report. Also, the cost of living is cheap. By GDP it ranks lower than Honduras, Senegal or Zambia, according to the IMF.

Put these three key facts together and Bosnia and Herzegovina becomes the perfect destination for Muslims looking to escape those hot Middle Eastern summer months.

The Agency for Statistics of Bosnia and Herzegovina reported an 88% increase in arrivals into the country from Saudi Arabia in 2017. For 2018 it reported a 64% increase for nationals of Qatar, 138% for Iran and 51% for "other Asian countries".

The very wealthy Arabs might be holidaying in lavish hotels across large European cities. But, there is a growing middle class in the Middle East, and it is increasingly opting for holidays in Bosnia and Herzegovina.

FlyDubai already has three daily flights to Sarajevo International Airport in the summer from Dubai. This is an immense level of frequency for an airport that only serves one million passengers annually.

The prices in Bosnia and Herzegovina are far cheaper and the social structure is culturally not as far removed from traditional Islam as most other European countries. There is also plenty of natural and historical wonders to see.

Several previous national airlines failed

So if Bosnia and Herzegovina is such fertile ground for an airline, why did so many recent attempts to establish a national carrier result in failure?

As outlined by Sarajevo Airport, there were five national carriers in operation over the last 30 years. From 1991, there was Air Commerce, but they only lasted until 1992. At that time, its passenger operations stopped due to the outbreak of the Bosnian War.

Then there was Air Bosna as the flag carrier of Bosnia and Herzegovina from 1994 until 2003, when it collapsed. The airline was resurrected by the government and renamed into B&H Airlines, which then collapsed again in 2015.

Also present in the country were Bosnian Wand Airlines and Arnoro, both of which collapsed within one year of basing their aircraft in Sarajevo International Airport.

FlyBosnia is set to break this trend of failed carriers in Bosnia and Herzegovina. Ultimately, what makes FlyBosnia more likely to succeed is its financial backing.

FlyBosnia was set up by Al Shiddi Group from Saudi Arabia. The Group is a seasoned investor in Bosnia and Herzegovina. Amongst other investments, it has built Hotel Bristol, the country's first five-star hotel.

Having that many sibling companies locally creates strong opportunities for joint marketing. Al Shiddi Group already makes use of this through FlyBosnia's homepage. Here, it advertises some of its other investments in Bosnia and Herzegovina as complimentary services to flight tickets it sells through FlyBosnia.

Two destinations launched, more to follow

In May we reported that FlyBosnia flew its first commercial flight. Since then it has formally launched three year-round routes to Riyadh, Kuwait and Jeddah. The airline also launched Gassim as a seasonal service, once weekly. Riyadh is the only route that operates daily, with Jeddah scheduled as one weekly and Kuwait a thrice weekly service.

This is a rather disappointing schedule for an airline that has two A319 aircraft. However, Al Shiddi Group's cautious strategy is not surprising. All those numerous attempts to establish a national carrier in Bosnia and Herzegovina had expanded too quickly. Perhaps the financial troubles of FlyBosnia's over-stretched regional competitor Adria Airways are another ground for caution.

It is also possible that the airline is saving capacity for charter flights. Local media portal klix.ba reported in February that FlyBosnia would be operating flights from Italy to Mostar (OMO). Mostar is another airport and a city in Bosnia and Herzegovina, located near the Catholic pilgrimage site of Međugorje.

FlyBosnia's charter flights for Catholic tour groups will thus complement its broader strategy of catering for inbound Muslim demand. Religious tourism is evidently an integral part of FlyBosnia's strategy.