By Updesh Kapur/Sharjah


We are not in the statistics game, nor in a marathon race for aircraft orders.”
Some clear down to earth words from the boss of one of the region’s leading airlines.
From its birth in 2003 as the Middle East and North Africa’s first low-cost airline, Air Arabia has grown in stature, maturing with a business model methodically executed.
Unlike its larger full-service airline neighbours which have multiplied their fleets and routes in such a short space of time, Air Arabia has charted a steady course in 12 years of flying.
Starting off from home base in Sharjah, its low-cost model has in recent years spread to further hubs across the Arab world.
Today, Air Arabia’s common fleet of 41 all Airbus A320 aircraft serves 104 cities across the Middle East, North Africa, Europe, Indian sub-continent and China from five operational hubs.
Sharjah accounts for two-thirds of the business.
The figures may not look too impressive compared with airline peers that have largely been responsible for fuelling the region’s dynamic aviation industry over the past decade.
But the figures work for Air Arabia shareholders. Bar the first full 12 months of operations, the publicly-listed company has given out dividends every year since.
“It’s been steady growth of 10 to 11% a year of a relatively new business that is of the right size compared with airlines in the region that have been around for 50 to 60 years,” says Air Arabia founder and group Chief Executive Officer Adel Ali.
“We have done remarkably well in the short time we have been around. We started because the market was hungry for a low-cost model offering flights at affordable fares.”
Air Arabia was the brainchild of Ali, a seasoned airline executive who plied his trade in a glittering 28-year career mostly with British Airways that saw him in a number of different management roles around the world.
It was during his later airline career at Gulf Air that he saw the opportunity for a niche low-cost carrier serving the Arab world that would open up a whole new ‘affordable’ market to a population catchment area of 300mn people.
“The whole travel industry in the Middle East, North Africa and sub-continent had been kidnapped by an aviation industry charging high fares that nobody could pay,” says the affable CEO who has been at the helm of Air Arabia since its launch in October 2003.
“Prices are much more acceptable now. You have five or six times more people travelling now and with more frequency thanks to our arrival in the Arab world. Legacy airlines would not have dropped their fares had it not been for Air Arabia and other low-cost airlines that have come up since.
“We have managed to grow the overall travel market. Every airline and airport in GCC has got bigger and there is a market for each one of us.”
With a clear mandate to essentially fly point-to-point short-haul routes to high demand destinations at the lowest possible cost and at affordable fares, Air Arabia was born. It chose Sharjah in the UAE as its launch pad, supported by the local authorities in the new venture.
From Sharjah – its biggest hub – Moscow to the north, Istanbul to the west, Nairobi to the south and Urumqi in China to the east are the furthest destinations served of maximum five hours flying time. The latter recently-launched route into mainland China, not served by any Middle East carrier, was seen as an opportunity to tap into the labour market as well as burgeoning commercial trade.
Ali is adamant to make a mark but not to have a business growing out of proportion at an uncontrollable pace.
“We are not in the statistics game, nor in a marathon race for aircraft orders,” he comments, adding, “our success is not about how many aircraft are parked at airports, but how profitable is the business. I don’t want to be in a position to grow our business and regret it.
“As long as our business drives economies, provides employment, is profitable and offers consumers safe, convenient and affordable travel, that is good.
Air Arabia’s Sharjah success story prompted Ali and his team to embark on a workable expansion strategy to cover the wider Mena region by setting up further hubs.
The airline’s second largest operational hub is Casablanca in Morocco serving a handful of domestic points, but mainly almost 20 European cities. Its newest hub is in Amman, launched in May, following Air Arabia’s 49% acquisition of Jordanian private carrier Petra Airlines. With fixed based operations also in Ras Al Khaimah, UAE, and Alexandria in Egypt, Air Arabia has expanded its foothold in key markets.
The group is waiting for the geopolitical situation in the region to settle down before venturing into new markets with further route and hub openings but is in no hurry.
“I have no doubt there will be more hubs but when I don’t know. There are still a lot of opportunities in the Mena region, but the geopolitical scenario is not supporting expansion right now,” adds Ali.
“Our focus is on the Arab world between Morocco and Muscat and once settled, the opportunities will come back quickly again.”
With a single fleet of narrow-body planes seating up to 170 passengers in an all-Economy configuration and flying a maximum five hours, there are no plans to move into the long-haul arena nor introduce a Business Class cabin like rivals, but Ali hasn’t discounted the idea.
“As we stand today our business model of single aircraft type and single cabin, give us magnificent cost saving advantages and fantastic operational dynamics. Changing all this can only make it complex,” he says.
“But we would not be good business people if we say no to any business opportunity. We are not stubborn about not doing it. If there is a need for it, we may consider it. The market is forever changing, strategies develop and they change with the environment.”
As Air Arabia prepares for delivery of a further three A320s by the end of the year, it will continue to follow a steady growth path.
Further openings of airspace have given rise to more capacity being pumped into Iran, Kingdom of Saudi Arabia and Pakistan in recent and coming months. Additional unannounced routes elsewhere will also come onboard.
Only time will tell however whether Air Arabia takes its low-cost short-haul strategy into new frontiers.

♦ Updesh Kapur is a PR & communications professional, columnist, aviation, hospitality and travel analyst. He can be followed on twitter @updeshkapur.

Related Story