Air Arabia orders ten new Airbus A320s

The carriers' growth continues, day after being declared the world's most profitable airline by an aviation consultancy.

Air Arabia is planning beyond the industry's current malaise.

A day after being declared the world's most profitable airline by an aviation consultancy, Air Arabia continued with its growth push by confirming an order for 10 Airbus A320 aircraft, worth US$770 million (Dh2.82bn) yesterday. The airline converted 10 purchase options into firm orders as its prepares to open its second base of operations - Casablanca, Morocco. The options were part of a deal signed with Airbus last November at the Dubai Airshow for 34 firm orders plus 15 options for the single-aisle aircraft. "Following Air Arabia's expansion plans and the new hub in Morocco, expected to operate next year, expanding the fleet size is certainly a need," said Sheikh Abdullah bin Mohammed Al Thani, the chairman of Sharjah-based Air Arabia. In the first quarter of next year, the airline plans to open Air Arabia Maroc, part of its expansion programme to export its successful budget airline business model around the Arab world. The Centre for Asia-Pacific Aviation called Air Arabia "the most profitable airline today" after it saw profits jump 29.7 per cent in the third quarter. "The earnings sweet spot is set to continue for Air Arabia as oil prices fall, although it will face increasing challenges from later in 2009 as FlyDubai gets off the ground," the firm noted. This summer, Air Arabia pulled out of its earlier joint venture in Nepal, FlyYeti.com, blaming concern over the nation's political instability. Air Arabia Maroc will initially focus on flights to Europe and Africa in partnership with Casablanca-based Regional Air Lines. Budget airlines are still scarce in the Middle East, where full-service, state-run airlines have been the industry norm. This year has seen the airline industry in turmoil as falling passenger demand and record fuel prices caused more than 30 airlines to shut down. Palestinian Airlines, based in El Arish, Egypt, ceased operations earlier this year, blaming political problems involved in setting up service to the Palestinian territories. [e-mail]