Air Arabia Abu Dhabi bullish on growth despite global aviation woes, CEO says

Low-cost joint venture between Air Arabia and Etihad Airways marks second anniversary since launch at height of pandemic in July 2020

Adel Ali, group chief executive of Air Arabia. Photo: Air Arabia

Air Arabia Abu Dhabi, the low-cost joint venture with Etihad Airways, is benefiting from “huge demand” for budget travel through the UAE capital and is bullish on continued growth despite global industry challenges, its top executive has said.

The airline expects to carry more than a million passengers this year, up from 800,000 since its inception in July 2020, Adel Ali, group chief executive of Air Arabia, told The National.

Seat load factor — a measure of how well an airline is filling its available seats — reached an average 80 per cent year-to-date, with destinations in Egypt and the Gulf among the most popular during the summer.

Pent-up demand for leisure, visiting family and friends, education and medical tourism is increasingly growing as travel restrictions ease in various markets, though long-haul business travel has yet to catch up, Mr Ali said.

“On one hand, there's huge demand for people to travel globally, and particularly in our region, with the UAE being open and with the business development of the country, business has been good for us,” he said.

On the other hand, “there is the fuel challenge … but when the oil price is high the economy is good in our part of the world, particularly in the UAE”.

The airline chief was speaking on the two-year anniversary of when Air Arabia Abu Dhabi was launched at the height of the Covid-19 pandemic on July 14, 2020. The airline made its maiden flight to the Egyptian port city of Alexandria from its base at the Abu Dhabi International Airport.

The UAE capital's first budget airline aims to draw tourists to the Gulf city, supply passengers from secondary cities into Etihad Airways' long-haul operations and offer cheaper travel options to UAE residents.

The joint venture is part of Abu Dhabi's push to diversify its economy, boost tourism and bolster its air connectivity.

Expansion plans

Air Arabia Abu Dhabi is currently focused on the Middle East and Indian subcontinent markets, serving 24 destinations with a fleet of eight Airbus A320 narrowbodies.

The airline plans to expand its network into more regions including Africa and Europe, Mr Ali said.

“As the world reopens, we will be looking at many, many more routes,” he said. “We will put a circle around Abu Dhabi and wherever we find potential within four to six hours, we'd like to do those routes, be it in the Middle East, Africa, Europe or India.

“There's a good plan for continuous growth and as we finish the requirements and get permission to fly to a number of these countries and finish the paperwork and we're ready, we'll be sharing more details.”

The airline will receive delivery of another A320 aircraft within three to four weeks, ending the year with a total of 10 planes in its fleet, Mr Ali said.

Recruitment team is 'extremely busy'

Air Arabia Abu Dhabi is hiring more staff to meet the surge in travel demand, with at least 100 employees needed for every aircraft delivered, Mr Ali said.

“The recruitment team has been extremely busy because of the growth and the market coming back, but we're not suffering from a shortage of staff because there is enough expertise in the country to recruit from and the surrounding regional market has been reasonable,” he added.

“I know that's not the case in a lot of places in the world but, so far, fingers crossed, we've been lucky.”

The global aviation industry is facing a shortage of employees as many who were laid off during the pandemic have moved into other occupations with more flexible work options. This has led to chaos at airports and capacity cuts at airlines.

Yields 'holding up' despite high fuel prices

Mr Ali's optimism about the airline's future growth comes despite a perfect storm for the aviation industry, with higher oil prices, rising inflation and staff shortages following the two years of the pandemic.

“The demand is there, people want to travel and the yields are holding up and that's good,” he said.

However, Air Arabia Abu Dhabi is not considering imposing a fuel surcharge despite rising prices, Mr Ali said.

“At the moment, this has not been discussed, mainly because the yields are holding up. At the moment, it's manageable … this industry is never operating with no challenges.”

Air Arabia's new joint ventures

Air Arabia group, which last year signed an agreement with Pakistani conglomerate Lakson Group to launch the new low-cost airline Fly Jinnah, expects the joint venture will receive its Air Operator Certificate (AOC) soon.

“We hope it won't be long before we finish it, with the Eid holidays it gets a bit slower, but I'm optimistic it won't be too long from now,” Mr Ali said.

Fly Arna, Air Arabia's joint venture with the Armenian National Interests Fund, obtained its AOC on June 11, he said.

It operated its first commercial flight between Yerevan, Armenia, and Hurghada, Egypt, on July 4. The Red Sea coast town of Hurghada is a major tourism spot featuring luxury resorts and watersports including diving and snorkeling.