UAE-listed Air Arabia plans to start operations of its new joint venture airlines in Pakistan and Armenia by early June after securing the necessary operational licences for the budget carriers, the airline's group chief executive said.
Air Arabia will place three leased Airbus A320 jets with Karachi-based Fly Jinnah to start with domestic flights initially, while Fly Arna will be assigned two leased A320s to begin its first international route, Adel Ali said on the sidelines of the Arab Aviation Summit in Ras Al Khaimah on Tuesday.
“They're both really working on the technical side of getting the Air Operator Certificate [AOC], and we're optimistic that by early May we will be able to do all that is required. If we do all that and we get issued with the AOC, then we hope that either by late May or early June we should be able to operate both airlines,” he told reporters at the conference.
Air Arabia Abu Dhabi, a low-cost joint venture launched with Etihad Airways at the height of the pandemic, is set to expand further this year as the emirate loosens pandemic-related travel restrictions, he said. It currently operates four Airbus narrow-body aircraft.
“There's a lot of work going on and we'd like before the summer to put more airplanes into that hub,” Mr Ali said. A decision on the number of aircraft will be made within the next few weeks.
Air Arabia operates a network of bases spread across the Middle East, North Africa and Asia. The Sharjah-based carrier has been pushing ahead with expansion after the Covid-19 pandemic as low-cost airlines bet on a recovery in short-haul travel demand amid rapid vaccine campaigns around the world.
Air Arabia signed the joint venture deals to establish new airlines in Abu Dhabi in 2020, and in Armenia and Pakistan in 2021.
Mr Ali confirmed on Tuesday that the carrier has suspended its Sharjah-Ukraine service amid the continuing conflict with Russia.
He said it was “too early” to determine how sanctions on Russia may impact its operations into the country, but that it will continue flights for as long as it is legal to do so.
“We, as an airline, operate to whichever airport that's open for business and people are travelling. Our job is to connect people and as long as it's open we will do that within the law and the regulations. The moment we can't fly somewhere legally, we stop flying,” he said.
The airline currently has no plans to increase capacity to Russia with additional services, he added.
Asked about the impact of rallying oil prices on Air Arabia's business, Mr Ali said the airline is 50 per cent hedged for fuel until 2024, a policy that has worked for it so far.
“At the moment we don't have a real concern, the yield is also holding up because the demand is high on the flights,” he said.
Air Arabia holds a “positive” outlook for 2022, although it is too early to tell given unexpected developments such as the Russia-Ukraine conflict, he said.
Air Arabia had ordered 120 Airbus A320 family jets worth $14 billion in 2019 and has yet to select an engine maker to power the single-aisle jets.
The airline is currently holding talks with both General Electric's CFM venture and Pratt & Whitney, the rival engine providers for the Airbus A320 Neo, for the jet engine order.
“No decision has been made, we continue to evaluate and look at it, we still have a little time,” Mr Ali said. “Both companies have got new types of engines and we're in a generally harsh environment, so there's a lot of work and analysis to be done and the teams are working. Because we have the time, we don't need to fully rush into it.”
The airline continues to evaluate “what's best commercially and technically”, with its finance and engineering teams comparing the offers from both the engine makers.
“We have a few months but the sooner we make a decision, the better for everybody,” he said.