Air Arabia to launch new carrier

The low-cost airline enters a joint venture to launch a new budget carrier based in Egypt as it continues to expand.

The Sharjah-based Air Arabia was the first budget airline in the Middle East and started its flights in 2003.

The low-cost airline Air Arabia has entered a joint venture to launch a new budget carrier based in Egypt as it continues to expand its presence despite a global downturn in the industry. The carrier, Air Arabia Egypt, will fly to destinations in Europe, the Middle East and Africa, with Egypt becoming the Sharjah-based company's third hub after the UAE and Morocco.

Egypt's Travco Group has taken a 60 per cent share of the venture as specified by Egyptian law governing the airline industry. "Egypt is a strategic middle point between our two hubs," said Adel Ali, the chief executive of Air Arabia. Mr Ali said total capital of US$50 million (Dh183.6m) would be jointly invested in Air Arabia Egypt. When asked about the launch date, he said: "It could be 2009, or it could be early 2010."

Mr Ali said Air Arabia Egypt planned to use a number of airports in Egypt, including those in Cairo and in the Red Sea area, but was still in the process of looking at options and planning schedules. "From Cairo, we can go to anywhere in Europe, as far as London," he said. "So we will be going to Italy, France, Germany, the UK ? the tourism market from Europe to Egypt is so high that we will be tapping into every possible airport we can think of."

Mr Ali said that the company's business model dictated that it flew to destinations within four-and-a-half hours of flying time. "Our focus will be on tourism and to develop more tourism into Egypt, so we will be doing a lot of holiday packages," he said. Air Arabia operates a fleet of 20 new Airbus A320 aeroplanes and has ordered 44 more. Mr Ali said more aeroplanes would be ordered as required but for now they would be distributed to meet the market needs.

Budget airlines have gained a greater foothold in the Middle East in recent years. Air Arabia was the first to launch in 2003, and flydubai started flights earlier this year. Kuwait's Jazeera Airways plans to open a second hub in the Middle East. A report last month from the International Air Transport Association showed a surge in the number of economy-class passengers in the Middle East as travellers looked for cheaper options, especially during the economic downturn.

"The market will only go positive; it won't go worse," Mr Ali said. Air Arabia, which launched its service from Sharjah, set up its second hub in Mohammed V International Airport in Casablanca. The airline operates flights to 57 destinations across the Middle East, Africa and Asia. Travco Group operates 146 hotels, resorts and cruises in Europe, Egypt and the Middle East, a large fleet of tourist transport vehicles and a range of aviation services including ticketing offices and aircraft ground handling services.

The company, which is based in Cairo, has offices in the UAE, Oman, Qatar, Syria and representative offices in the UK and Germany. [e-mail]