Air Arabia Studies Fleet Expansion to Fuel Budget Carrier Growth

Air Arabia PJSC (AIRARABI) is studying the purchase of additional narrow-body aircraft as the airline seeks a larger slice of the budget travel market in the Middle East, Chief Executive Officer Adel Abdullah Ali said.

The company is looking at the Airbus A320neo, the Boeing Co. (BA) 737 Max as well as Bombardier Inc. (BBD/B)’s C-Series, Ali said in an interview. A decision on a purchase is unlikely to come before next year, and the Sharjah, United Arab Emirates-based airline has no plans for an announcement in time for the Dubai Air Show in November, he said.

“Each has a unique selling proposition,” Ali said of the three aircraft. “It’s still early stages, there’s a lot of work to be done. It will eventually bounce to commercial decisions, which one is financially better for us.”

The discount carrier is pursuing growth plans to support surging traffic, with passenger growth jumping 18 percent to 1.4 million in the first quarter. Air Arabia operates an all-Airbus fleet consisting of 31 A320s, with an order for 44 more. The airline now serves more than 80 destinations across the Middle East, North Africa, Asia and Europe.

Ali said he’s “happy” with passenger development in the second quarter, with numbers “looking right” so far. Air Arabia fills more than 80 percent of aircraft seats on average during the year, and there are no plans to add a business-class product to rival a similar offering by FlyDubai, Ali said.

“In the low cost business, you have to be very focused, and moving away from it will generate additional cost, so we focus on what we have today,” Ali said.

To contact the reporter on this story: Deena Kamel Yousef in Dubai at dhussein1@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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