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Middle East budget carrier Air Arabia is expected to restore its capacity and gradually return its grounded fleet to service if the current recovery in travel demand is sustained, the company’s top executive has said.
However, it remains unclear when the listed airline’s pre-COVID-19 network will be fully restored, as the recent discovery of coronavirus variants, most notably the highly contagious Omicron, is casting uncertainty over the entire travel industry.
“Today, we are witnessing a steady growth in air traffic driven by the easing in travel restrictions. However, the situation continues to be unpredictable, with the emergence of the new variants, and aviation is among the first industries to be impacted,” Adel Ali, the airline’s CEO, told Zawya.
The coronavirus pandemic has tested companies in the air travel industry in unforeseen ways, with airlines alone losing billions of dollars in revenue since last year due to record declines in passenger numbers.
In recent months, the sector started to turn the corner, as travellers take to the skies again amid easing COVID-19 restrictions. However, the discovery of the Omicron variant has sparked the resurgence of travel restrictions worldwide, threatening to undermine the recovery in the industry.
Healthy demand
Ali said the UAE’s only listed carrier is currently seeing “a healthy demand” in air travel, particular within the budget segment of the market, further raising hopes of a full return to capacity.
Like the rest of the airlines worldwide, Air Arabia grounded its commercial passenger fleet due to the global lockdown last year. Since the reopening of borders, the carrier has gradually restored its network and is currently operating in destinations like Pakistan, India, Egypt and Saudi Arabia through its base in Sharjah International Airport.
When asked when the airline is expected to fully restore its capacity, Ali could not confirm the exact timeline, citing that “it all depends on the situation globally and in the region”.
“If the recovery is steady and remained the same, we are more likely to bring back the fleet into service gradually.”
As for aircraft deliveries, the airline doesn’t have any in the pipeline until 2024, when the previously ordered 120 aircraft from the Airbus A320 family, including A320neos, A321LRs and A321XLRs, are expected.
Steady recovery
“We are hopeful that the steady recovery will continue throughout 2022 as we explore more opportunities for growth. In 2021, we managed to add some 40 new routes to our global route network from our hubs in the UAE, Morocco and Egypt, and we also announced two new joint ventures to establish new low-cost carriers in Armenia and Pakistan,” said Ali.
While the outlook for the global air travel industry remains uncertain, there is something to cheer about on the local front. Ali noted that the upswing in the UAE’s travel and tourism sector, helped partly by Expo 2020 Dubai, could support the recovery in the industry.
“The Expo 2020 Dubai… attracted nearly 3 million visits in its very first months. That is a record. We are optimistic that this positive trend will continue in the coming months and would therefore contribute to the revival of the travel and tourism sector,” Ali said.
The airline reported a net profit of 209 million dirhams ($56.9 million) for the third quarter of 2021, up by 575 percent from the same period last year. During the same period, Air Arabia recorded more than 1.9 million passengers from its hubs in the UAE, Morocco and Egypt, registering a 190 percent growth over the same period in 2020.
Fitch Ratings said on Friday that while it expects conditions for airlines to improve next year, travel will remain below 2019 levels until 2024 due to potential outbreaks, lingering restrictions and a slower rebound in business travel.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021
