According to reports, the Air Arabia Abu Dhabi launch will still go ahead, despite the issues caused by coronavirus. The low-cost airline, based in the United Arab Emirates, is scheduled to launch in Q2 of 2020. Although the current pandemic has largely stopped international travel, partners Etihad and Air Arabia don’t see this as an issue.
Starting a new low-cost airline
As a result of the coronavirus, many airlines are having to rethink strategies and put plans on hold until a better time arises. Flights have been suspended, jobs have been cut, and aircraft have been grounded. Needless to say, this is not the most prosperous time for the industry.
That said, Etihad and Air Arabia fail to be deterred by this decline in travel demand. Both airlines are clinging onto the hope that they will be able to launch their new Middle Eastern low-cost carrier in a few short months. The inaugural flight for Air Arabia Abu Dhabi is due at some time in the second quarter of this year. That means that by June 2020, the airline should be up and running.
Speaking before the widespread travel disruption, the Group Chief Executive at Etihad Aviation Group, Tony Douglas, gushed about the establishment of the new airline. Speaking to The National, he said:
“This exciting partnership supports our transformation program and will offer our guests a new option for low-cost travel to and from Abu Dhabi, supplementing our own services.”
It is perhaps the opportunity of this new venture on the horizon, which is spurring the airline’s imminent launch. However, some have warned that launching an airline, not to mention a low-cost one, in the current climate is unwise.
Should the Air Arabia Abu Dhabi launch go ahead?
There are reasons why Etihad and Air Arabia will be keen to stick to their timeline for the launch of their new carrier. Although we are already into Q2 2020, there are still some weeks to go, enough time, perhaps, for the partners to evaluate how the outbreak is affecting aviation.
Other airlines, including Air France, are working with time frames that suggest the pandemic could be over within three months. Although there is no guarantee that this is accurate, it does mean the launch of Air Arabia Abu Dhabi is in-keeping with some trains of thought.
In many ways, it’s easier to push forward with the development of the airline and then, if necessary, to delay the actual launch, than it would be to pause the project now and subsequently restart. Added to this, when demand does start to return, domestic will likely pick up first. Air Arabia Abu Dhabi would be in a perfect position to capitalize on this.
According to Breaking Travel News, a spokesperson from Air Arabia said,
“There are no plans to delay or postpone. Preparatory work for the launch remains in motion and will progress as the market situation improves.”
It could get off to a bad start
However, as many positive arguments as there are for this case, there are also significant drawbacks. Namely, there is a big financial risk. If Air Arabia Abu Dhabi cannot secure the customers or the routes it needs to remain profitable, it will lose more money than it earns.
We’ve already seen one startup struggling to survive, as Starlux Airlines emerged just ahead of the pandemic, and has subsequently had to cancel all flights.
That said, low-cost airlines have always had a draw. They are cheap, and that’s something that might mirror disposable income rates in the future. As such, Air Arabia’s low-cost tickets will be more attractive than others from more well-known airlines.
Conclusion
There are potential advantages to continuing with Air Arabia Abu Dhabi’s launch. However, the financial risk is so significant, and the climate so uncertain that it’s far from an ideal situation for a launch.
Do you think the airline’s launch should be postponed? Let us know your thoughts in the comments.
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