Air Arabia and Etihad Moving Ahead In Partnership

At this year’s live on stage aviation session at ATM we’ll explore the business strategies of two of the Gulf’s leading airlines. The airlines in question are Air Arabia and Etihad.

Both hold very different positions in the market place yet are linked in a new collaborative venture which would not have been imaginable only a few years ago.

Gulf’s Airlines look to recovery in 2022

Air Arabia’s Group CEO Adel Ali has led the airline since its foundation as a low cost carrier in 2003 with a single base in Sharjah. Today he heads a group of airlines with subsidiaries operations in Morocco, Egypt, Ras Al Khaimah and most recently, Abu Dhabi. Others are planned.

Air Arabia introduced the low cost airline (LCC) model to the Gulf, proving not only that there was strong customer demand but also that it was possible to meet that demand profitably.

Air Arabia is the only airline group to be publicly listed in the region. The airline has been managed skillfully by Ali and he is no stranger to crises. Particularly impressive is the fact that despite the challenges of the Covid pandemic, Air Arabia delivered strong profits over the last year.

It is expanding and updating its fleet of Airbus A320 aircraft with the new more efficient NEO version and also adding larger A321 NEO LR’s which permit it to add new longer range markets.

Want to know more about the recovery of the Gulf’s leading airlines?

Attend the interview with Tony Douglas and Adel Abdullah Al Ali at ATM 2022.

Joint ventures lead to growth opportunities

As mentioned, there are growth plans with two new joint ventures in Armenia (Fly Arna) and Pakistan (Fly Jinnah) due to open in the middle of this year.

Already up and running is Air Arabia Abu Dhabi which is in the process of expanding with new destinations in India being added in the coming months. This is of particular interest as it is a joint venture with Etihad whose CEO Tony Douglas is our other guest in this year’s live interview.

Etihad is certainly not an LCC, being very much a full service network carrier operating out of its Abu Dhabi hub. Douglas has been at the helm since 2018 and has faced the challenge of stemming the airline’s losses.

The red ink was already flowing before the pandemic as a result of Etihad’s previous ambitious strategy of investment in a number of airlines, including Alitalia and Jet Airways, which were themselves losing money.

Founded in 2003, Etihad had been trying to catch up on the scale of its neighbouring airline Emirates, however the enormous losses dictated a change of strategy when Douglas took over the leadership. He had already begun the work of extricating the airline from its partnerships and cutting fleet size before the Covid pandemic hit.

Etihad simplifies its fleet

The airline is now taking a less ambitious approach positioning itself as a mid-size carrier. It has not only reduced but simplified its fleet and will now focus on state of the art new generation wide bodied Airbus A350’s and Boeing 787 Dreamliner’s. Indeed, evidence that the approach is delivering results has been seen recently in Etihad’s first quarterly profits in its history (January-March 2022).

Whilst reducing in size, Etihad is still maintaining its strategy of providing the opportunity to connect and offer a wide network at its Abu Dhabi hub, but there has been a need to find a new approach.  This is where the partnership with Air Arabia comes to the fore, it’s an interesting approach between the two very different airlines but one which appears to be delivering early results. Air Arabia provides a more cost efficient way to feed Etihad’s long haul services.

Etihad’s reputation for service excellent service is not something which will change but it may see a shift customer mix in its premium cabins, with a potential shift more to leisure than from corporate business travel.

Aviation panel to be held at ATM 2022

There will be much to discuss and limited time to do so in the interview but for all airlines the topic of the environment is now an overriding priority and one on which Etihad and Air Arabia have had a lot to say recently. I hope you’ll be able to join us for this exciting session!

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Director, John Strickland, is a graduate of the University of York and has held senior positions with a number of airlines including British Caledonian, British Airways, KLMuk and Buzz. John was instrumental in the decision by KLM to establish the low cost operator Buzz and in its selection of new routes. His 40 years of experience have exposed him to the business models of regional, global, legacy and low cost carriers. JLS Consulting was established in 2003 and now serves a growing range of clients including airports, airlines, investors and those whose businesses require strategic insight on and advisory services concerning the air transport sector. John regularly devises and chairs panel discussions and interviews senior executives at industry conferences and events. Media work is undertaken for numerous global media organisations including the BBC, CNN, Sky, Al Jazeera, and business specialists Bloomberg and CNBC. John also contributes to a wide range of respected written publications including the Financial Times, Wall Street Journal/Dow Jones Newswires, Business Week, The New York Times, Gulf News, Reuters and AFP.

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