Etihad and Air Arabia to launch LCC

A new Abu Dhabi-based low-cost carrier is to be set up by Etihad Aviation Group and Air Arabia to cater for the growing budget travel demand in the region.

Etihad Aviation Group and Air Arabia have signed an agreement to form a joint venture company that will operate as a low-cost carrier. The airline, to be known as Air Arabia Abu Dhabi, will operate from a hub at Abu Dhabi International Airport.

“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,” said Tony Douglas, group chief executive of Etihad Aviation Group. “We look forward to the launch of the new airline in due course.”

The move is Etihad Airways' first major partnership since abandoning plans to grow through minority stakes in overseas carriers following its failed attempts with Alitalia and Air Berlin.

Sharjah-based Air Arabia already has hubs in Alexandria (Egypt), Casablanca (Morocco), and Ras Al Khaimah (UAE).

Adel Al Ali, group chief executive 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.” 

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”, the airlines said in a statement.

LCCs accounted for a 17 percent share of seat capacity to and from the Middle East in 2018, compared to only 8 percent in 2009.

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