Etihad and Air Arabia join to launch low-cost carrier

Abu Dhabi’s first low-cost carrier emerges as Etihad and Air Arabia combine to grab a larger slice of the expanding market
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Etihad and Air Arabia have struck a deal to create Abu Dhabi’s first low-cost carrier, which will be called ‘Air Arabia Abu Dhabi’.

The joint venture will operate as a low-cost passenger airline with its hub in Abu Dhabi International Airport.

Tony Douglas, group CEO for the Etihad group, said that partnering with Air Arabia will help the pair to ‘serve’ the expanding role of tourism in the capital’s and UAE’s economic growth.

He said: “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”.  

Adel Al Ali, group CEO of 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.

“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”.

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.

The UAE’s travel and tourism sector contributes to over 13.3% of the nation’s GDP.

The MENA low-cost air travel model was first introduced in the UAE in 2003 and has been rapidly growing since then.

Today, the Middle East market enjoys the third highest gains in intra-regional low-cost carrier penetration rate. Low-cost carriers accounted for 17% share of seat capacity to and from the Middle East in 2018, compared to only 8% in 2009.

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