The UAE will get a fifth budget airline next year when major European low-cost carrier Wizz Air launches a new concept in Abu Dhabi.
Wizz Air signed a preliminary agreement with Abu Dhabi Development Holding (ADDH) on Thursday to launch Wizz Air Abu Dhabi from the UAE’s capital.
Operations are expected to begin in the second half of 2020.
The Romanian airline will be the UAE’s seventh and will intensify competition on European routes as well as rival other established and new low-cost carriers.
Wizz Air’s announcement comes just two months after Air Arabia and Etihad Airways unveiled a new low-cost venture based in Abu Dhabi. Indian LCC SpiceJet also revealed recently it will be launching its first Middle Eastern base in Ras Al Khaimah.
Sharjah's Air Arabia and flydubai make up the remainder of what is an increasingly saturated low-cost market in the UAE.
Wizz Air Abu Dhabi will look to establish routes to areas where the carrier already has a strong presence, such as Europe. In the long-run, the carrier will look to pierce the Indian subcontinent, the wider Middle East and Africa.
Wizz Air said in a statement that its new airline, comprised of a fleet of Airbus A321neo aircraft, will gain access to markets with a total of five billion customers across Europe and beyond.
József Váradi, CEO of Wizz Air Holdings, believes that the new carrier can be a “significant player” in the region.
He said: “We are proud that our first airline to be established outside of Europe is in Abu Dhabi... This is a new path of growth for Wizz Air, built on our successful ultra-low cost business model, bringing affordable travel to even more customers.”
Bryan Thompson, CEO of Abu Dhabi Airports Company, said: "The launch of the new airline is further testament to the emirate’s robust aviation infrastructure... New travel offerings continue to inspire visitors from around the world to come to Abu Dhabi.
“We welcome the world to Abu Dhabi, and look forward to providing an exceptional passenger experience to even more travellers through this venture.”
Meanwhile, Mohamed Hassan Al Suwaidi, CEO of ADDH, said that its partnership with Wizz Air will aim to capitalise on “the growing demand for budget travel”.
Analysts have said that although the low-cost market in the UAE is increasingly competitive, Wizz Air has timed its launch well. Expo 2020 next year will see a surge in demand for travel in the region, especially among budget-conscious travellers and traders.
Speaking on the announcement of the increasingly competitive low-cost market in the Middle East, Stefan Pichler, Royal Jordanian’s CEO, told AVB that the market is quite simple.
“The issue is in terms of competition [in the low-cost sector], the latest entrant in the market is always the biggest competitor to the other guys who are already there.
“Because if an airline is five or 10-years old you have more legacy. Whoever starts the latest has an advantage.”
Both Airbus and Boeing predict that the Middle Eastern market will require around 3,000 additional aircraft over the next two decades, amounting to nearly $700 billion.