United Arab Emirates-based budget carrier Air Arabia plans to start a hub in Alexandria, Egypt in the first quarter of 2010, its CEO said on Monday.

"We are hoping to start operations in the first quarter of 2010," Adel Ali told reporters at a conference in the UAE city of Al-Ain.

Air Arabia has formed a joint venture with Egyptian Travco Group to launch a budget ariline in Egypt. The airline, Air Arabia Egypt, plans to fly to European, Middle Eastern and north African destinations.

The new airline will enable Air Arabia, the Arab world's largest listed airline by market value, to open its third hub and diversify away from increased pressure in its home market.

Air Arabia currently operates a hub from its base at Sharjah and another from Casablanca in Morocco that opened this year.

Formed in 2003, it has a fleet of 20 Airbus A320 aircraft and has placed an order for 44 more A320s. - Reuters