UAE budget airline Air Arabia is optimistic about growth across its seven hubs, with “healthy” forward bookings in the fourth quarter and an expected boost from the opening of Abu Dhabi's new airport terminal next week.
The trend of “revenge travel” that was prevalent after the Covid-19 pandemic is easing but passenger demand has held up and is expected to extend into the coming months, the airline's group chief executive, Adel Ali, said in an interview.
Leisure travel is set to grow at an annual rate of 4 per cent to 7 per cent in terms of passenger numbers, although corporate trips will lag behind as companies opt to conduct some of their business by video conference, he told The National.
“November is a busy events season and forward bookings are looking reasonably well and healthy,” Mr Ali said.
“Hopefully the geopolitical [tensions] will not extend further and will be contained and will not impact business … so far, people are travelling.”
Air Arabia operates hubs in Sharjah, Ras Al Khaimah, Abu Dhabi, Morocco, Egypt, Armenia and Pakistan.
Air Arabia Abu Dhabi, the low-cost joint venture with Etihad Airways, is expected to benefit from the opening of Abu Dhabi International Airport's new Terminal A on November 1.
“Opening a modern new airport makes the customer experience much more happier, smoother and easier. So definitely, we are very excited for the opening of the [new terminal at the] airport and shifting of the airline,” Mr Ali said.
“It is hard work for everyone involved in Abu Dhabi aviation to shift an airport or an airline, but it's worth it because you end up with a much better facility … For us, we see the tourism infrastructure that has been put into place in Abu Dhabi over the last few years as a great opportunity for the airline to grow.
“The demand keeps increasing and more people want to visit. Abu Dhabi as a tourist city is becoming more value for money. We think the new hub in Abu Dhabi should be a source of continuous organic growth for us.”
Air Arabia is marking 20 years of service since it began operations in October 2003, becoming the first budget airline in the Middle East.
The milestone coincides with the long-awaited opening to the public of Terminal A in Abu Dhabi on November 1.
Airlines will move to the new Terminal A building in three phases over a two-week period from November 1 to November 14.
Air Arabia Abu Dhabi will shift its operations on November 14, along with 10 other airlines.
From November 15, all flights will operate solely from the new terminal.
Business across Air Arabia's other hubs continues to be brisk, Mr Ali said.
Fly Jinnah, a joint venture between Air Arabia and Pakistani conglomerate Lakson Group, is expected to begin international operations by the end of 2023 or the beginning of 2024, Mr Ali said.
Its domestic flights are “doing very well”, with load factors exceeding 90 per cent.
Air Arabia Maroc, which is based in Casablanca, is “doing good”, particularly, as Morocco hosted the annual meetings of the World Bank and International Monetary Fund earlier this month.
Performance at its hub in Borg Al Arab International Airport in Alexandria, Egypt, is also “very good” amid demand from tourists and Egyptian expatriates.
Plans for Air Arabia Sudan, its joint venture with Sudanese conglomerate Dal Group, have been temporarily shelved amid the war in the country but will be reviewed once fighting ends, Mr Ali said.
Air Arabia is getting “a lot of interest” from cities and businesses looking to set up a joint venture airline.
“Opportunities tend to knock on our door and we evaluate these,” Mr Ali said. “But what we’re busy with now is growing our existing hubs … Our hands are full and we haven’t looked beyond that.”
Airbus plane deliveries in 2025
To cope with the group-wide growth, the airline has signed an agreement to lease eight planes that will be added to its fleet in 2024, all of which will be delivered before the summer of next year, he said.
It leased a total of 23 jets in 2022 and 2023.
Air Arabia currently has no plans to buy new aircraft, after its signed a $14 billion (Dh51 billion) firm order for 120 Airbus A320 family jets at the Dubai Airshow in 2019, Mr Ali said.
The delivery of those jets – including A320 Neos, A321 Neos and A321 XLRs – has now been delayed to the first quarter of 2025, from the fourth quarter of 2024, due to supply chain problems facing the global aviation industry, Mr Ali said.
The airline is scheduled to receive 20 planes each year from 2025 until 2030.
Jet engine selection
Air Arabia is also close to reaching a decision on an engine that will power these single-aisle planes, Mr Ali said, declining to provide a time frame.
The airline is continuing discussions with General Electric's CFM venture and Pratt & Whitney, the rival providers for the Airbus A320 Neo, for the engine order.
The carrier has been “slow in deciding” because of the production issues facing engine makers, he said.
The new jets will offer a reduction on fuel burn of about 12 per cent, a key part of its sustainability efforts.
Sustainable aviation fuel (SAF) is widely considered to be the most significant contributor to helping the airline industry reach its goal of net-zero by 2050, but supplies are limited, making it more expensive than kerosene.
“SAF means increasing ticket prices by five times more to break even, so it's not a practical solution,” Mr Ali said.
Asked about the impact of oil price volatility, as the Israel-Gaza war stokes fears of an escalation in the oil-producing region, Mr Ali said the airline was continuing with its oil-hedging policy.
Pioneering low-cost travel 20 years ago
Air Arabia launched its inaugural flight from Sharjah to Bahrain in October 28, 2003, when Mr Ali first introduced the concept of low-cost travel to the region 20 years ago.
The airline, which was established on February 3, 2003 by royal decree, began operations with two Airbus A320s, flying short-haul trips to Bahrain, Kuwait, Lebanon, Oman and Syria.
The idea was to democratise air travel and make travel accessible to people of all socioeconomic backgrounds.
It's been a fantastic journey. The most significant part is revolutionising air travel in the region, enabling people who weren't able to travel by air before to get on a plane
Adel Ali,
group chief executive of Air Arabia
“It has been a fantastic journey,” said Mr Ali, reflecting on the 20-year experience. “The most significant part is revolutionising air travel in the region, enabling people who weren't able to travel by air before to get on a plane.”
Introducing the idea of budget travel was not easy at the outset as people had stereotypes, such as uncomfortable seats or old aircraft, which required changing this mindset, he said.
“Low-cost carriers 20 years ago was a bad thing to have. The public knew very little about it … we had to educate the public about this business model,” Mr Ali said.
“For us, we find success is the number of people that never got on [a] plane and now it’s a normal part of their lives. That was our aim and objective.”
The airline became profitable in its first year of operations.
Since then, Air Arabia – the UAE's only listed carrier – has increased the size of its fleet to 71 aircraft and grown its network to more than 190 destinations. It carried 13 million passengers in 2022.
“Air Arabia has been the trailblazer for low-cost carriers [LCCs] in the Gulf region. It has not only proved that there is consumer demand for low-cost services but that it can be met profitably,” John Strickland, an aviation consultant with JLS Consulting, told The National.
The airline is expected to continue being profitable as travellers look for better deals amid inflationary pressures on consumer spending, according to analysts.
“When economic times are tough, people look for more economic pricing and this is offered by LCCs like Air Arabia,” Mr Strickland said.
The airline's second-quarter profit rose to a record Dh459 million ($124.96 million), up from Dh160 million in the same period last year, it said in August.
"As a first mover in the region, Air Arabia had played a pivotal role in shaping the low-cost aviation landscape," Linus Bauer, founder and managing director of Bauer Aviation Advisory, told The National.
“By offering competitive pricing, point-to-point services and minimal frills, it has set a precedent for other carriers,” he said.
“Furthermore, Air Arabia’s focus on secondary airports has helped decongest major hubs and spread out the economic benefits of aviation more evenly.”
The low-cost model recorded “substantial growth and acceptance” in the Middle East.
“The model has been particularly successful in catering to the price-sensitive segment of travellers, including expatriates working in the Gulf countries and tourists looking for budget-friendly travel options,” Mr Bauer said.
“The growth of LCCs has also been facilitated by the strategic geographical location of the Middle East, serving as a hub connecting East and West.”
Future of the low-cost carrier model
The future success of the LCC model will depend on several factors, including inflationary pressures and a slowing global economy facing mounting uncertainties.
“Rising fuel costs and inflation will potentially impact consumer spending and force LCCs to increase their fares. However, the inherent cost efficiency of the LCC model helps in mitigating some of these pressures,” Mr Bauer said.
“A global economic slowdown and uncertainty could result in reduced travel demand. LCCs could potentially be more resilient due to their lower cost structures and focus on short to medium-haul routes.”
Budget airlines in the region include Flydubai, Wizz Air Abu Dhabi, Kuwait's Jazeera Airways, Saudi Arabia's Flynas and Flyadeal.
Air Arabia can continue to capitalise on the UAE's growth as a global travel and tourism hub, tap into Africa's emerging travel market through its Egypt and Morocco hubs and seize growth opportunities in the underserved markets of its Pakistan and Armenia hubs, Mr Bauer said.
“Ongoing geopolitical tensions in the Middle East and beyond, competition and regulatory changes will continue to pose challenges, but also present opportunities for strategic partnerships and expansion,” he said.
“Air Arabia’s proven track record, strategic hub locations and efficient operations place it in a strong position to navigate these challenges and continue to thrive in the low-cost carrier segment.”
Airlines are affected by oil price fluctuations, currency swings, extreme weather, conflicts and supply chain bottlenecks.
They are also recovering from coronavirus-induced border closures that forced airlines to ground their fleets, driving the industry to the brink of collapse.
Mr Ali said it had “been hard, as this industry is, but every moment of it has been enjoyable and satisfactory”.
Reflecting on his personal journey with the airline for two decades, Mr Ali said: “We've had challenges but I'm very satisfied 20 years later to sit here and say 'it has been good'.”
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
FIXTURES
All times UAE ( 4 GMT)
Friday
Saint-Etienne v Montpellier (10.45pm)
Saturday
Monaco v Caen (7pm)
Amiens v Bordeaux (10pm)
Angers v Toulouse (10pm)
Metz v Dijon (10pm)
Nantes v Guingamp (10pm)
Rennes v Lille (10pm)
Sunday
Nice v Strasbourg (5pm)
Troyes v Lyon (7pm)
Marseille v Paris Saint-Germain (11pm)
Kandahar%20
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Profile
Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
Based: Jumeirah Lake Towers, Dubai
Size: 55 employees and 100,000 cleaning requests a month
Funding: The company’s investors include Collective Spark, Faith Capital Holding, Oak Capital, VentureFriends, and 500 Startups.
PAST 10 BRITISH GRAND PRIX WINNERS
2016 - Lewis Hamilton (Mercedes-GP)
2015 - Lewis Hamilton (Mercedes-GP)
2014 - Lewis Hamilton (Mercedes-GP)
2013 - Nico Rosberg (Mercedes-GP)
2012 - Mark Webber (Red Bull Racing)
2011 - Fernando Alonso (Ferrari)
2010 - Mark Webber (Red Bull Racing)
2009 - Sebastian Vettel (Red Bull Racing)
2008 - Lewis Hamilton (McLaren)
2007 - Kimi Raikkonen (Ferrari)
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
MATCH INFO
Euro 2020 qualifier
Norway v Spain, Saturday, 10.45pm, UAE
Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
The specs
Engine: 1.6-litre 4-cyl turbo
Power: 217hp at 5,750rpm
Torque: 300Nm at 1,900rpm
Transmission: eight-speed auto
Price: from Dh130,000
On sale: now
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BMW%20M4%20Competition
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Fixtures
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UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models
Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
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Price: From Dh439,000
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How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
Company profile
Company: Eighty6
Date started: October 2021
Founders: Abdul Kader Saadi and Anwar Nusseibeh
Based: Dubai, UAE
Sector: Hospitality
Size: 25 employees
Funding stage: Pre-series A
Investment: $1 million
Investors: Seed funding, angel investors
Company info
Company name: Entrupy
Co-founders: Vidyuth Srinivasan, co-founder/chief executive, Ashlesh Sharma, co-founder/chief technology officer, Lakshmi Subramanian, co-founder/chief scientist
Based: New York, New York
Sector/About: Entrupy is a hardware-enabled SaaS company whose mission is to protect businesses, borders and consumers from transactions involving counterfeit goods.
Initial investment/Investors: Entrupy secured a $2.6m Series A funding round in 2017. The round was led by Tokyo-based Digital Garage and Daiwa Securities Group's jointly established venture arm, DG Lab Fund I Investment Limited Partnership, along with Zach Coelius.
Total customers: Entrupy’s customers include hundreds of secondary resellers, marketplaces and other retail organisations around the world. They are also testing with shipping companies as well as customs agencies to stop fake items from reaching the market in the first place.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
'The worst thing you can eat'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
The Breadwinner
Director: Nora Twomey
Starring: Saara Chaudry, Soma Chhaya, Laara Sadiq
Three stars
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
The biog
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
'Laal Kaptaan'
Director: Navdeep Singh
Stars: Saif Ali Khan, Manav Vij, Deepak Dobriyal, Zoya Hussain
Rating: 2/5
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
UAE currency: the story behind the money in your pockets
