Adel Ali of Air Arabia
Adel Ali of Air Arabia engages in more plain speaking, telling the Arab Aviation Summit that the region's airline industry needs to see consolidation. Image Credit: Supplied

Dubai: Air Arabia’s CEO Adel Al Ali has called for more consolidation within the Middle East airline industry, with the Sharjah airline open to M&A opportunities.

“We look at any opportunities - being a publicly listed company, that's one of the benefits,” said Ali, speaking at the Arab Aviation Summit. “At the moment, there is nothing on the table, but we always have appetite for such things.”

Air Arabia, the Middle East’s largest low-cost carrier, announced new airline ventures in Pakistan and Armenia in the last few months. Air Arabia Abu Dhabi, a joint venture with Etihad Airways, is already flying between UAE and several destinations in South Asia.

“There are too many small players in the LCC (low-cost carrier) market in the region and surrounding us,” said Ali, adding airline partnerships in the past involved “signing a piece of paper” without any real commitment or cash. “They tend to work for a period of time, but they fail very quickly – unless you invest in something, you don’t look after it.”

Hedging needs

Air Arabia has been hedging about 40 per cent of its fuel needs and that has helped the airline keep ticket prices competitive. “We have been hedging about for quite a number of years – occasionally, it bites you, but, sometimes it has worked for us,” said Ali. “I wish the industry was such that when the oil price goes up, you are able to adjust your pricing accordingly, but, it doesn't.

Airlines to hire

With COVID-19 no longer being the chief concern for airlines, hiring is back into focus, according to aviation heads. “We all now need to recruit more people, and a lot of people who stopped working at a certain age, we need to replace them,” said Ali. “This will take time, particularly when you're talking about some technical proficiency that takes a bit of time to train. Manpower has become a challenge.

“The (COVID-19) virus is getting softer and lighter - there is almost a two-year backlog of travel to be caught up with,” said Ali. “From that perspective, as countries open, I think the market will come back.”