Etihad Airways Group and Air Arabia Group are to establish a new joint venture Air Arabia Abu Dhabi that will act as a feeder to Etihad, the two airline groups announced on October 16. With the JV both airlines want to duplicate the success of the Emirates/flydubai partnership that has been around since 2017.
Etihad and low-cost Air Arabia haven’t disclosed financial details about their agreement, but it is Etihad’s first regional investment after taking a share in various airlines in Europe and India. The collapse of airberlin and Alitalia caused a major rethink in Etihad’s strategy, resulting in the departure of CEO John Hogan and the arrival of Tony Douglas. Under his leadership, Etihad witnessed the demise of India’s Jet Airways.
Air Arabia Abu Dhabi is aiming to capture its fair share of the United Arab Emirates’ growing tourism, worth some 13.3 percent of the GDP. While many travelers use Dubai as their gateway to the region, Abu Dhabi has seen growth and is hoping for more once the new airport terminal will be operational.
“By partnering with Air Arabia and launching Abu Dhabi’s first low-cost carrier, we are serving this long-term vision. This exciting partnership supports our transformation program and will offer our guests a new option for low-cost travel to and from Abu Dhabi, supplementing our own services”, Tony Douglas said in a press statement.
Air Arabia’s CEO Adel Al Ali added: “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 capitalizing on the expertise that Air Arabia and Etihad will be providing”.
Air Arabia was formed in 2003 and operates out of two of the UAE’s seven emirates, Sharjah, and Ras al Kaimah, as well as from Morocco and Egypt. The airline operates a fleet of 53 Airbus A320ceo’s (40 in Sharjah) and two A321LRs leased from Air Lease Corporation (ALC), with three more expected this year and a sixth next year. The fleet operates to 170+ destinations in the Middle East, North Africa, Asia, and Europe. Etihad has a fleet of 15 Airbus A320ceo’s and 10 A321ceo’s for its regional operations.
Air Arabia reported an HY1-profit of AED 338 million versus 230 million the previous year, with revenues up to AED 2.173 billion from 1.816 million. It flew 4.55 million passengers, plus 10 percent at a load factor of 84 percent compared to last year’s HY1 of 79 percent. During HY1 the airline opened ten new routes.
It remains to be seen how Air Arabia will integrate its network with that of Etihad in Abu Dhabi. For this, it will need extra aircraft. At its HY1-presentation Al Ali said the airline would possibly place an order in either Q3 or Q4, so expect an announcement at next month’s Dubai Air Show.
The Emirates/flydubai codeshare jointly carried 3.29 million passengers in 2018 to 84 destinations.