Etihad Aviation Group and Air Arabia announced the signature of an agreement to launch ‘Air Arabia Abu Dhabi’, the capital’s first low-cost carrier. Etihad and Air Arabia 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.
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 and enjoys a prominent standing as a global aviation hub, thanks to the UAE’s ultra-modern infrastructure, advanced services sector and high-quality air transport.
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.
Further information regarding the new joint venture will be communicated in the near future.
Source: Air Arabia