Etihad, Air Arabia ink deal to set up new low-cost carrier

Air Arabia Abu Dhabi will operate as a low-cost passenger airline with its hub in Abu Dhabi International Airport
Etihad, Air arabia, Abu dhabi, Low cost carrier
2016 Chad Slattery All Rights Reserved

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Etihad Aviation Group and Air Arabia on Wednesday announced the signing of an agreement to launch Air Arabia Abu Dhabi, the UAE capital’s first low-cost carrier, reports Arabian Business.

Etihad and Air Arabia said they will establish an independent joint venture company that will operate as a low-cost passenger airline with its hub in Abu Dhabi International Airport.

The new carrier will complement Etihad Airways’ services from Abu Dhabi and will cater to the growing low-cost travel market segment in the region, a statement said.

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Based in Abu Dhabi, the new company will adopt the low-cost business model. Its board of directors, consisting of members nominated by Etihad and Air Arabia, will steer the company’s independent strategy and business mandate, it added.

Tony Douglas, group CEO, Etihad Aviation Group, said: “Abu Dhabi is a thriving cultural hub with a clear economic vision built on sustainability and diversification. With the emirate’s diverse attractions and hospitality offerings, travel and tourism play a vital role in the economic growth of the capital and the UAE. By partnering with Air Arabia and launching Abu Dhabi’s first low-cost carrier, we are serving this long-term vision."

Tony Douglas, group CEO, Etihad Aviation Group.

He added: “This exciting partnership supports our transformation programme and will offer our guests a new option for low-cost travel to and from Abu Dhabi, supplementing our own services. We look forward to the launch of the new airline in due course."

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Adel Al Ali, group CEO, Air Arabia, said: “Home to the first low-cost carrier in the MENA region, the UAE has developed over the years to become a world-leading travel and tourism hub. We are thrilled to partner with Etihad to establish Air Arabia Abu Dhabi that will further serve the growing low-cost travel segment locally and regionally while capitalising on the expertise that Air Arabia and Etihad will be providing."

He added: “This step demonstrates the strength of the UAE aviation sector and serves the vision driving its growth. We look forward to a successful partnership and the launch of the new carrier."

The MENA low-cost air travel model was first introduced in the UAE in 2003 and has been rapidly growing since. Today, the Middle East market enjoys the third highest gains in intra-regional low-cost carrier penetration rate. Low-cost carriers accounted for 17 percent share of seat capacity to and from the Middle East in 2018, compared to only 8 percent in 2009.

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