UAE-listed Air Arabia and the state-owned Armenian National Interests Fund (ANIF) plan to establish a new Armenian low-cost national carrier based in the capital city, Yerevan.
The new airline, a joint venture operated by both entities with a base at Zvartnots International Airport, will adopt Air Arabia's low-cost business model, Air Arabia said in a statement on Wednesday.
“We see tremendous potential for Armenia in building its airline sector, which will add sustained value to the economy through job creation and the development of [the] travel and tourism sector,” said Adel Al Ali, group chief executive of Air Arabia.
Work on securing the air operating certificate — which will allow the airline to start operating — will start shortly, according to the statement. More details about the launch date, fleet and destination network will be announced in due course, it said.
“Having a strong national low-cost airline is essential for the development of Armenia’s air transport sector, especially as a tool to recover faster from the Covid-19 crisis,” said Tatevik Revazian, chairman of the Civil Aviation Committee of Armenia.
The Armenian travel and tourism sector accounted for nearly 11.8 per cent of the country’s economic output in 2019 and 12.5 per cent of total employment, according to the statement.
“We are confident that the expertise Air Arabia brings to the JV will support the seamless launch and growth of the carrier,” Mr Revazian said.
The new Armenian airline will become Air Arabia's second joint venture airline project.
Air Arabia Abu Dhabi, a joint venture between Air Arabia and Etihad Airways, launched a year ago in July 2020 during the Covid-19 pandemic with a maiden flight to the Egyptian port city of Alexandria from its base at Abu Dhabi International Airport.
The UAE capital's first budget carrier aims to draw tourists to the Gulf city, supply passengers from secondary cities into Etihad's long-haul operations and offer affordable travel options to UAE residents. The joint venture is part of Abu Dhabi's push to diversify its economy, boost tourism and enhance its air connectivity.
Air Arabia operates five hubs, in Ras Al Khaimah, Sharjah, Abu Dhabi, Egypt and Morocco.
In May, Mr Ali said he sees a “much better” second half for air travel demand in 2021 before a return to normality by 2022.
The Covid-19 pandemic has hit the global aviation sector particularly hard, but demand is beginning to recover in fits and starts due to the increased pace of vaccine distribution in many countries across the world.