Etihad Aviation Group, owner of Etihad Airways and Air Arabia has signed an agreement to launch ‘Air Arabia Abu Dhabi’ which it says will be the capital’s first low-cost carrier.
Etihad and Air Arabia will establish an independent joint venture company operating as a low-cost passenger airline with a hub in Abu Dhabi International Airport.
“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,” said Adel Al Ali, group chief executive officer, Air Arabia.
“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”.
The airlines said the new carrier would complement Etihad Airways’ services from Abu Dhabi and will cater to the region’s growing low-cost travel market.
Tony Douglas, group chief executive officer, Etihad Aviation Group, 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”.
Douglas commented: “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.”
The new company will be based in Abu Dhabi and will adopt the low-cost business model with a board of directors consisting of members nominated by Etihad and Air Arabia.
The airlines added that the UAE’s travel and tourism sector contributes to over 13.3% of the nation’s GDP, while the MENA low-cost travel model has been growing rapidly since it was first introduced in the UAE in 2003.
The pair added that the Middle East market sees 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.