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Dubai: Etihad Aviation Group and Air Arabia announced on Wednesday they have signed an agreement to launch Air Arabia Abu Dhabi, the first low-cost carrier based out of the UAE capital.
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The two aviation companies will establish a joint venture that will operate as a budget airline based out of Abu Dhabi International Airport.
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The board of directors of the joint venture will consist of members nominated by Etihad and Air Arabia, and the company will have an independent strategy and business mandate.
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While Sharjah-based Air Arabia already has hubs in other countries including Egypt and Morocco, its presence in Abu Dhabi will be under a newly-created entity and not as an additional hub, Gulf News understands.
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Tony Douglas, group chief executive officer of Etihad Aviation Group, said in a statement that the partnership will serve Abu Dhabi’s tourism goals and contribute to the emirate’s economic growth.
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Already, the UAE has four local carriers (Emirates, Etihad, flydubai, and Air Arabia), two of which (flydubai and Air Arabia) are low-cost.
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Experts have long said the market may be overcrowded, considering the UAE’s population of under 10 million people.
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In 2017, Emirates and flydubai announced a partnership that includes codeshare deals and schedule alignment.
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Speculation has also been rife about a merger between Emirates and Etihad, especially after Etihad reported its third consecutive year of losses in 2018.
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Both airlines have repeatedly denied any merger talks, though, instead saying that they are working closely on back office operations.
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“With the emirate’s diverse attractions and hospitality offerings, travel and tourism play a vital role in the economic growth of the capital and the UAE. By partnering with Air Arabia and launching Abu Dhabi’s first low-cost carrier, we are serving this long-term vision,” Etihad’s Douglas said.
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