It is “too early” to say whether Air Arabia Abu Dhabi, a joint venture between Etihad Airways and Air Arabia, will take some of the slots of Wizz Air following its exit from the UAE capital, Etihad's chief executive has said.
“It is too early because it requires aeroplanes, it requires pilots and they need to study that,” Antonoaldo Neves told The National when asked if Air Arabia Abu Dhabi would be interested in Wizz Air's airport slots in other destinations.
Hungarian carrier Wizz Air will suspend its Abu Dhabi operations from September 1, it said in a statement on Monday.
Asked if the ultra low-cost carrier's departure will mean less competitive pressure for Air Arabia Abu Dhabi, Mr Neves said: “They're adding capacity here into Abu Dhabi but it is too early to tell because everything happened so quickly.”
However, the joint venture is profitable and Air Arabia is “doing a terrific job”, said Mr Neves, who is also chairman of the board in Air Arabia Abu Dhabi.
Wizz Air has cited operational challenges, including engine problems that have grounded aircraft among its reasons for the exit. The airline began operations in the UAE capital in January 2021.
On Wednesday Air Arabia Abu Dhabi said it had added two Airbus A320s to its fleet and will add two more before the end of the year, increasing operational capacity by 40 per cent in 2025.
“This growth supports the rising demand for air travel to and from Abu Dhabi,” Adel Al Ali, group chief executive of Air Arabia, said in a statement. “The planned capacity increase in 2025 will further contribute to the capital’s broader economic and tourism vision while continuing to offer value-driven air travel to our customers.”
A day after Wizz Air's announcement, Etihad Airways on Tuesday said it was introducing flights to Almaty, Baku, Bucharest, Madinah, Tbilisi, Tashkent and Yerevan. These routes were served by Wizz Air Abu Dhabi.
Asked if Etihad was taking over some of Wizz Air's slots, Mr Neves said: “It does not work like that. These destinations were part of our 2030 plan. Where there is a space in the market, someone is going to fill it in, and we have the agility to fill it. We saw a market opportunity and we took it.
“These slots are not the same [as Wizz Air] because they are different flight times … so technically speaking, it's different slots.”
The traffic rights to operate in these markets are available to UAE airlines, he added. Etihad would have been able to enter them even if Wizz had continued its Abu Dhabi operations.
The destinations will become underserved with Wizz Air's exit from Abu Dhabi and they were already on Etihad's radar before that, he said.
“These markets that we chose, we believe that they can accommodate in a profitable way our flights,” he said.
Linus Bauer, founder and managing director of consultancy BAA & Partners, told The National that Wizz Air's retreat “reduces competitive pressure” on UAE carriers, especially flydubai and Air Arabia, and may allow them to consolidate share on certain price-sensitive routes.
Geopolitical tensions in the region may have “dented travel optimism, but it hasn’t destroyed it. What’s changed is that passengers – especially in the budget segment – are factoring in travel risks and flexibility more than ever before,” he said.
“The appetite for ultra-low fares may remain, but not at the cost of unpredictability. This puts added pressure on low-cost carriers to deliver not just price, but reliability – something increasingly difficult to guarantee in today’s environment.”
Gulf airspace closures
In his years of experience in the aviation industry across global markets, Etihad Airways' boss has seen his share of challenges: Workers strikes in Europe, floods in Brazil and the Gulf airspace closures during the Israel-Iran war.
Etihad Airways has managed “very well” the closures that halted operations at Abu Dhabi's busy airport for a few hours in June, is on track to report “high” second-quarter profits and its travel bookings for July and August are strong, Mr Neves.
The scope of the airspace challenge was not as big as the fallout from work stoppages or natural disasters that paralyse air travel for longer periods, he said.
“I can guarantee you that the challenges we had, are not even close to the challenges you have in Europe when you have a strike,” he said. The airspace closures also did not compare to the impact of record floods that caused the six-month closure of Salgado Filho international airport, in the Brazilian state of Rio Grande do Sul, in 2024, he added.
“We are blessed: We have a very efficient airspace operation,” Mr Neves said.
“The day the airspace was closed, I was in Etihad from 10pm to 2am following very closely the operation, staying in direct contact with air traffic control, the Sheikh Zayed Air Navigation Centre and our airport.”
“I've been in these situations before, and what I've seen here is a level of professionalism and competency that I've never seen in my career. So that day I went back home at 2am and slept so well … my family was waiting for me and asking: 'How did it go?' and I said: 'It is all good'.”
The Gulf countries' management of the airspace closure, following Iran's thwarted attack on Qatar's US airbase at Al Udeid, was efficient thanks to “robust” systems, procedures and safety standards, according to the airline chief.
“It was amazing, I saw it. What we have here is a blessing. We know how to manage these situations,” Mr Neves said.
Speaking at a media briefing in Singapore on Wednesday, International Air Transport Association director general Willie Walsh said the impact of geopolitical issues on airlines is greater “than I've ever seen before”, Reuters reported.
Second quarter earnings
Mr Neves admitted the geopolitical tensions and airspace closures had created a “dent” in bookings “but it's completely recovered”.
“It's behind us. I don't even think about that any more,” he said.
Etihad's load factor – a measure of how well an airline fills available seats – has reached 92 per cent this week.
“I don't have space, it's crazy. July and August are as busy as ever before,” Mr Neves said.
He said the airline's earnings took a hit from higher costs due to making longer flights to avoid certain airspace and a “bit less revenue” but this was not “significant to change the trajectory of market expansion of Etihad”.
“I just saw our results. Our profits year-on-year are going to be high,” he said.
Mr Neves said the airline did not record any increases in its insurance costs amid the Middle East conflicts.
“I just submitted to my board approving my insurance policy renewal and it's cheaper than before,” he said.
The airline also has an oil hedging policy in place that is helping it deal with recent fuel price volatility.
“We have a very good hedging policy so we can absorb those shocks, so it's not a concern for us,” Mr Neves said.
“We're in a good position and we work very hard for that. The teams are doing a terrific job.”
