Abu Dhabi based Etihad is to invest with AirArabia to create a new low cost carrier.
The boom in low cost travel has spiked dramatically in the gulf region in the past two years, something Emirates just a few miles down the road understands well with its deep involvement in flyDubai.
This will be Etihad’s first investment in anything external since its catastrophic investments in JetAirways, AirBerlin, AlItalia and Darwin all left it with billions in losses as each and every one failed.
Even though Etihad is focused on its own recovery, it feels it has little choice but to get involved in a market that could prove crucial to its own survival longer term. flyDubai is acting as a huge source of regional transfer business for Emirates and is growing at a phenomenal rate, never mind the fact that it’s opened up a customer base to the advantages of low cost travel that was desperately under-served.
The new airline will somewhat unimaginatively be called ‘AirArabia Dubai’. AirArabia is based in one of the other less well known Emirates, Sharjah.It operates out of bases as far afield as Casablanca in Morocco, Alexandria in Egypt and another of the UAE states, Ras Al Khaima, as well as Amman in Jordan
Air Arabia Group and its subsidiary airlines control 52 A320-200’s each with around 162 economy seats, and 2 A321neo LR with 215 economy seats, a third is due for delivery soon with more on order.