Delivery of the 120 Airbus A320s starting 2024 will come at the right time for Sharjah-based Air Arabia, according to its CEO Adel Ali.
“It’s worked out in our favour - every indication is saying markets will fully go back to 2019 levels in 2024,” said Ali. “Hopefully, if all those predictions are correct… we will be in the right position to take delivery at the time. Fortunately, we do not have to address our fleet as a result of COVID-19.”
Last year, Air Arabia placed a $14 billion order for 120 Airbus A320 family aircraft to support its network expansion strategy. The 2024 delivery date was not done by designed, but Airbus could not at the time give earlier slots, said Ali.
UAE suspended flights from India last month in response to a spike in COVID-19 cases in the country. This has hit Air Arabia’s passenger numbers much like other airlines operating those routes.
“The Indian subcontinent has gone down in big numbers, it is almost close to not flying there,” said Ali. “We do fly people into India, Bangladesh, Pakistan, and Nepal, but we don’t bring people back. It’s good to see that the [COVID-19 infection] trend in Indian subcontinent is actually improving.”
While the crisis forces airlines to scale back activity and re-think age-old strategies, Air Arabia continues to do what it does best: keeping costs low. The Sharjah-based airline managed a profit of Dh34 million in the first quarter of 2021 even as larger rivals struggle to get into positive territory.
“We made sure that we restructured our business, we talked to all our suppliers and there were a lot of discussions with bankers in terms of aircraft loans and so on,” said Ali.
A flexible work policy also contributed to “cash preservation,” he added. “We did a lot of cost restructuring and we cleaned up our business – because of the cost saving in 2020, the first quarter was reasonably good.”
Abu Dhabi opportunity
Air Arabia, a partner in Air Arabia Abu Dhabi, sees huge opportunity in the emirate. Abu Dhabi “has invested a lot of money into building a tourism infrastructure - we saw that as a huge opportunity.”
Despite Abu Dhabi still requiring quarantine, Air Arabia Abu Dhabi is doing “relatively well,” he added.
On Sunday, Belarus forced a Ryanair flight carrying a wanted opposition activist to divert and land in the country, provoking widespread outrage from European leaders and the airline industry.
Ali hopes the incident was a “one-off” for the industry. “It is an unfortunate one, I seriously hope it's just a one off… and it's something that will be dealt by the governments of the states that are involved.”