Bahrain - Capital A Berhad (AirAsia Group) has signed a letter of intent (LOI) with the Transportation and Telecommunications Ministry to explore establishing the kingdom as AirAsia’s Middle East hub. The partnership is projected to contribute an estimated BD3 billion (equivalent to $8bn) to Bahrain’s economy over the next five years.

The massive expansion, announced during the Gateway Gulf 2025 investment forum, is expected to support over 100,000 jobs across the aviation and services ecosystem, creating specialised roles for the Bahraini workforce and providing a significant boost to the country’s GDP.

Transportation and Telecommunications Minister Dr Shaikh Abdulla bin Ahmed Al Khalifa said the deal reinforces Bahrain’s position as a “tourism and logistics hub in the Middle East” and enhances its role as a strategic connector. “The ambition of Bahrain to diversify the economy according to Economic Vision 2030 gets another boost from this partnership with Capital A and AirAsia,” he added.

The partnership outlines a multi-faceted collaboration across three major areas: airline operations, maintenance (MRO), and logistics.

Capital A chief executive Tony Fernandes called the partnership a “game-changer,” announcing ambitions to operate over 25 daily flights via Bahrain by 2030, carrying more than 20 million passengers over the next five years.

“The future of travel is multi-hub, seamless and borderless,” Mr Fernandes said. He added that by potentially operating a Bahrain-based Air Operator’s Certificate (AOC), the group will “carry on our mission of ‘Now Everyone Can Fly’.”

AirAsia will explore launching flights from its existing Asian megahubs in Malaysia, Thailand, the Philippines, and Indonesia to Bahrain, with onward connectivity potentially extending to Europe and the United States. The group will also evaluate establishing a Bahrain-based AOC to operate narrowbody aircraft into key cities in the Middle East, Central Asia, Africa, and Europe.

Commercial airline ticket sales are hoped to begin by December/January, with the first flight tentatively scheduled for March.

Capital A’s Maintenance, Repair and Overhaul (MRO) arm, Asia Digital Engineering (ADE), plans to invest approximately $250m to establish a state-of-the-art MRO facility in Bahrain. The new facility will include hangars and workshops capable of servicing both narrowbody and widebody aircraft, aiming for the fastest MRO turnaround times in the region.

The group plans a multi-year talent development programme to train and employ Bahraini nationals in pilot, crew, engineering, and ground roles, targeting over 1,000 hires in the first year.

Capital A’s logistics arm, Teleport, will position Bahrain as its primary gateway to expand beyond Asia for the first time, with an estimated investment of $50m.

Teleport plans to base dedicated freighters in the kingdom to strengthen connectivity for e-commerce flows across the Middle East, Europe, Africa, and the CIS. Logistics services are expected to be the first component to launch, potentially beginning as early as December.

Mr Fernandes noted that the long-term investment would be in the billions, stressing the importance of Bahrain’s rail connection plans, which will allow AirAsia to use the kingdom to access the wider GCC market via rail for logistics.

Dr Shaikh Abdulla credited the speed of the agreement to the concerted effort of “Team Bahrain,” saying, “We were able as Team Bahrain to deliver that.”

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