Air Arabia maps out expansion strategy

Air Arabia is eyeing expansion opportunities in Central Asia, Levant and the Mediterranean and aims to up frequencies to GCC destinations, ATN can reveal.

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By  Gemma Greenwood Published  December 4, 2006

Air Arabia is eyeing expansion opportunities in Central Asia, Levant and the Mediterranean and aims to up frequencies to GCC destinations, ATN can reveal. The only factors hindering the low cost carrier’s growth are the time it takes to secure new routes and take delivery of new aircraft, according to Air Arabia’s CEO, Adel Ali. “We have a number of routes on the agenda, but in the airline industry we have to cover a lot of negotiation and make sure routes are commercially viable,” he told ATN. “We want to expand in India if we succeed in gaining more air rights and we are looking at Pakistan, but it’s up to the Pakistan Government.” Istanbul had proved a hit, he said, and as a result, more Turkish and Mediterranean destinations were likely, including cities such as Athens. “Double dailies to key Gulf destinations are also required,” he added. Ali was speaking last month when Air Arabia launched four new destinations – Chennai and Thiruvanthapuram in India, Kathmandu in Nepal and Yerevan in Armenia – taking the carrier’s total destination count to 32 across 20 countries. This month the airline will launch a bi-weekly service to Lataki, its third destination in Syria (December 4). The Sharjah-based airline also marked its third birthday (October 28), by officially launching its holiday division, Air Arabia Holidays. “Our aim is to offer accommodation and car hire in every destination that we serve,” said Ali. However, he ruled out establishing Air Arabia-branded hotels, cruise ships or other associated products – a strategy adopted by UK-based low cost carrier, easyJet. “We are an airline and we want to make sure we deliver on that. We don’t want to compromise our position or confuse the customer. If we were to set up a hotel operation, it would be a separate organisation,” he said. Air Arabia’s fleet, which started three years ago with two leased Airbus A320s, now comprises eight brand new A320s and one leased aircraft. Ali said the carrier would focus on short-haul and had no intention of entering the long-haul arena. The carrier, which broke even in its first year and reported an AED 32.1 million (US $8.7 million) profit in its second year, is preparing to announce its full-year financial results next month and Ali is cautiously optimistic. “At the moment we are going through a positive cycle and it’s looking good; but in the airline industry, the situation can change quickly so I would be foolish to say too much,” he said. Ali was also upbeat about online bookings, which make significant cost savings. “Three years ago 2% of our customers booked online, but now it’s 30%,” he revealed. “The reason online is not growing as fast as it is in Europe is that the banks don’t issue credit cards to people on low salaries.” Air Arabia made booking easier earlier this year by allowing cash payments to be made at Emirates Post offices and some UAE Exchange outlets.

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