LONDON: Etihad Airways is setting up a low cost carrier with Air
Arabia in what is a major change of direction for the Abu
It represents Etihad’s first tie up with another airline since
its ill-fated equity alliance strategy which saw it take stakes in
a number of struggling European carriers, some of which went bust,
including Air Berlin.
Air Arabia Abu Dhabi will operate from Abu Dhabi International
Airport and will target rising demand from the budget segment, the
pair said in a statement on Wednesday.
Etihad Group CEO Tony Douglas said: “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
Abu Dhabi-based Etihad and Dubai-based Emirates invested heavily in
their premium cabin offering during the UAE’s boom years, tapping
into strong regional demand for business and first class travel.
However the sharp fall in oil prices since 2014 and a regional
economic slowdown has hit premium travel hard and forced both
carriers to cut costs and lay of staff.
Etihad’s move into the low cost segment mirrors a similar
partnership between Emirates and flydubai, the low cost carrier
started in 2008.
Etihad and Air Arabia did not say when flights would commence or
which routes would be served but that further details “would be
communicated in the near future.”
While premium travel continues to face headwinds in the Gulf,
demand remains strong in the budget segment. Low-cost carriers
accounted for a 17 percent share of seat capacity to and from the
Middle East in 2018, compared to only 8 percent in 2009.
Etihad Airways currently flies to about 80 destinations with a
fleet of 108 Airbus and Boeing aircraft, that carried 17.8 million
passengers in 2018. Air Arabia, which is listed on the Dubai
Financial Market, operates 54 Airbus A320 and A321 aircraft and
serves 170 routes.
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Source: FS – All-News-Economy
Etihad and Air Arabia start Abu Dhabi-based budget carrier