Wizz Air, Eastern Europe's biggest low cost airline, signed a preliminary agreement with Abu Dhabi Developmental Holding Company to form a local carrier.
The venture, known as Wizz Air Abu Dhabi, will operate a fleet of Airbus A321neo aircraft and is the Budapest company’s first airline outside of Europe, the carrier said in a regulatory filing on Thursday. Wizz Air is listed on the London Stock Exchange and is part of the FTSE 250 Index. It flies to more than 60 destinations with Budapest Airport serving as the airline's largest hub.
"Through our partnership with Wizz Air, we aim to capitalise on the growing demand for budget travel and support the continued growth of Abu Dhabi as a world-class cultural and tourist destination,” said Mohamed Al Suwaidi, chief executive of ADDH.
The new airline will start operating in the second half of 2020 and focus on establishing routes to markets in which Wizz Air has existing, high-growth operations, namely Central and Eastern and Western Europe, as well as the Indian subcontinent, Middle East and Africa over the long run.
"Wizz Air believes that the establishment of a truly ultra-low cost airline in Abu Dhabi can contribute to the continued growth of Abu Dhabi as a world-class cultural and tourist destination. ADDH's deep rooted knowledge of the local market, support and navigation in a new market for Wizz is invaluable and will boost the successful development of the new airline," the company said in a statement.
"The new airline's customer proposition will align directly to that of Wizz Air with a singular focus on offering a superior value-based quality air travel built on the foundations of one of the world's greenest aircraft fleets," the statement added.
The agreement is subject to the receipt of all internal and external approvals in addition to the new airline satisfying all regulatory requirements of the UAE General Civil Aviation Authority to obtain an Air Operator's Certificate.
"ADDH's deep rooted knowledge of the local market, support and navigation in a new market for Wizz is invaluable and will boost the successful development of this low-cost airline," said Jozsef Varadi chief executive of Wizz Air. "Wizz Air Abu Dhabi will be an incremental path of growth for Wizz Air, built on our successful ultra-low cost business model, bringing affordable travel to ever more customers."
Sheikh Mohammed bin Hamad, chairman of Abu Dhabi Airports, said the emirate's airport welcomed the potential contribution of the new airline, and the effect the partnership to the country's national economic development.
The new venture "is further testament to the Emirate’s robust aviation infrastructure," said Bryan Thompson, chief executive of Abu Dhabi Airports. "In addition to a strong transfer passenger programme, Abu Dhabi International Airport has also seen an increase in origin and destination traffic this year—remaining one of the fastest-growing airport hubs in the region."
The airport operator is targeting an additional 1.4 million passengers to Abu Dhabi International Airport by 2021 to its current annual point-to-point traffic of 7.7 million passengers, Mr Thompson said in March. Abu Dhabi is focusing on developing its tourism sector as part of a push to diversify the economy and reduce reliance on oil revenues. The capital is looking to boost the number of visitors across the business, medical, cultural and cruise tourism sectors. In addition to Louvre Abu Dhabi, the emirate also reopened its oldest building, Qasr Al Hosn fort site, as a museum. Abu Dhabi Airports' move is in line with its main customer Etihad Airways' increasing focus on serving Abu Dhabi, where it’s based.