LCCs growth to 'continue despite crisis'
Barcelona, October 6, 2009
The geographic expansion of Mena-based low cost carriers (LCCs) has thrown open significant growth opportunities for these airlines and their sustainable growth will continue despite global challenges, said the head of budget carrier Air Arabia.
Speaking at the sixth WLCA Congress in Barcelona, Adel Ali, the group chief executive officer of Air Arabia, said, “As low-cost carriers such as Air Arabia continue to organically grow their fleets and geographic footprints – reaching out across the Middle East and throughout Asia, Africa and Europe – it is clear that we are now competing on a global platform.”
Addressing an audience of more than 100 senior executives from low-cost and traditional carriers from across the globe, Ali said that the continued geographic expansion of Mena-based LCCs heralded the 'coming of age' of this vital sector.
Ali pointed out that such “regional champions” were now increasingly recognised as global brands.
“Despite the extremely challenging conditions facing the aviation sector worldwide, LCCs in the Middle East and North Africa region, with their revived focus on commercial sustainability, are seizing the opportunity to grow their global market share,” Ali remarked.
“Importantly, this is happening at a time of increased regional competition – and rapid deregulation of our skies. Over the past several years, and especially since Air Arabia pioneered the regional low-cost model in 2003, we have also seen a rapid corporatisation of the aviation sector in the Mena.
Following its initial public offering in 2007, Air Arabia became the first airline in the Arab world to go public, focusing on self-financing its growth plans and fleet expansion.
With two operational hubs in the UAE and Morocco and a third on the way, and with nearly 60 global destinations and an order book of 44 new aircraft, the organic expansion of Air Arabia is now very much the benchmark for other regional carriers, including both low-cost and traditional, he noted.
While speaking at two panel discussions – “LCCs in the Middle East: Opportunity and risk in the fastest growing aviation market” and “Capital management, hedging and financing strategies and investor’s perspectives” – Air Arabia chief told a global audience that the underlying economic and demographic fundamentals of the region positioned the low-cost sector to continue its expansion in the years to come.