On Wednesday, Etihad Aviation Group, the owner of low-cost carrier Air Arabia, announced that it will be launching "Air Arabia Abu Dhabi," the UAE capital's first low-cost carrier.
An independent joint venture company will be set up by Etihad and Air Arabia to operate as a low-cost passenger airline with its hub in Abu Dhabi International Airport.
"With the emirate's diverse attractions and hospitality offerings, travel and tourism play a vital role in the economic growth of the capital and the UAE. By partnering with Air Arabia and launching Abu Dhabi's first low-cost carrier, we are serving this long-term vision," said Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group.
The new airline will add on to Etihad's services from Abu Dhabi and to the region's growing low-cost air market.
The new company, that will be based in Abu Dhabi, will adopt the low-cost business model with board of directors consisting of members nominated by Etihad and Air Arabia. It will steer the company's independent strategy and business mandate.
The UAE's travel and tourism sector contributes to over 13.3 percent of the country's GDP and enjoys a prominent standing as a global aviation hub.
The low-cost air travel model was first introduced in the UAE in 2003 for the Middle East and North Africa's region and has been rapidly growing since then.