UAE to launch new low-cost airline with Europe's Wizz Air
Operations expected to start in the second half of 2020.
The UAE will be getting its seventh airline, Wizz Air Abu Dhabi, which would result in intensified competition in European routes in the near future and in the Subcontinent, Middle East and Africa routes over the long run.
The new carrier - which will also be the nation's fifth budget carrier and will be launched in the second half of next year - will also give direct competition to the other two Abu Dhabi-based airlines, flag carrier Etihad Airways and another upcoming low-cost airline, Air Arabia Abu Dhabi.
Abu Dhabi Developmental Holding Company (ADDH) on Thursday signed a preliminary agreement with Wizz Air Holdings to launch the airline from the UAE capital.
Wizz Air Abu Dhabi will be launched next year along side Air Arabia Abu Dhabi and SpiceJet in Ras Al Khaimah. They will join incumbents flydubai and Sharjah's Air Arabia in the UAE's budget airline industry.
Wizz Air Abu Dhabi will focus on establishing routes to markets in which Wizz Air has existing, high-growth operations, namely Central and Eastern and Western Europe, as well as the Indian subcontinent, the Middle East and Africa over the long run.
European aircraft manufacturer Airbus has said that five of the world's aviation mega cities are now in the Middle East, including Dubai and Abu Dhabi. It predicted that the number of aircraft serving the UAE will treble over the next two decades.
The fleet size of operators serving the UAE from all the regions will nearly treble to around 1,730 aircraft by 2038 from around 630 in 2019. This includes 750 small category aircraft and 980 medium and large aircraft serving the UAE market by 2038. It said the UAE-India, UAE-Pakistan, Saudi Arabia-UAE, UAE-Egypt and the UAE-UK routes will be fastest-growing networks over the next 20 years.
US planemaker Boeing last month forecast that the Middle East will need an additional of 3,130 jets worth Dh2.66 trillion and recruit 231,000 workforce including pilots, technicians and cabin crew over the next two decades mainly owing to population and tourism growth. The region will need 64,000 new pilots, 65,000 technicians and 102,000 cabin crew over the next 20 years, it said.
"We believe the new airline has the potential to be a significant player in the region," said József Váradi, CEO of Wizz Air Holdings.
"As a trusted government partner with a clear mandate to boost key sectors of Abu Dhabi's non-oil economy, we are proud to partner with Wizz Air, an airline with strong market presence and brand recognition in key European source markets," said Mohamed Hassan Al Suwaidi, CEO of ADDH.
"Through our partnership with Wizz Air, we aim to capitalise on the growing demand for budget travel and support the continued growth of Abu Dhabi as a world-class cultural and tourist destination," Al Suwaidi added.
Mark Martin, CEO of Martin Consulting, said Wizz Air - one of the most stable airlines in Europe - has grown rapidly and it is now expanding rapidly to Middle East, the Gulf region, Mediterranean and North African countries.
"For Abu Dhabi to find Wizz Air as a partner makes a lot of strategic and commercial sense. The model works great because Wizz Air flies Airbus A320s and A321LRS and they have tremendous amount of commonality with MROs, airlines, pilots and cabinet crew in Dubai and the UAE," he said. "This is a perfect timing to launch budget carrier because next year the UAE will be hosting Expo 2020 so that will need a robust airline and transport network. And especially with budget-conscious travellers, traders and businessmen, this is a perfect timing and clearly a win-win deal," Martin added.
"The announcement of the new venture between the Abu Dhabi Development Holding and Wizz Air marks as a testament of UAE's vision to diversify its economic sectors hence its economy," Juwhra Salem, an economic specialist, told Khaleej Times.
"Nonetheless, it will be very interesting to witness if Abu Dhabi's consumer market will utilise the presence of this LCC for their travel options or they will stick to their initial preferences. It will also be worth noticing how would the start of the new airline impact the operations of Abu Dhabi's national carrier, Etihad Airways, as well as the newly-announced joint venture between Air Arabia and Etihad Airways."
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