Etihad-Air Arabia Discount Venture Aims to Fill India Void

(Bloomberg) -- Etihad Airways and Air Arabia's plan for a new discount airline will focus on flights between India and Abu Dhabi following the collapse of Jet Airways.

The future carrier would seek to take over most of the 100 slot pairs for the market held by Etihad after Indian ally Jet Airways failed this year under the plan originated by Air Arabia Chief Executive Officer Adel Ali, according to Deepa Rajesh, sales director at the company's Cozmo holiday arm, who spoke in an interview.

Air Arabia, the Middle East's biggest low-cost carrier, could deploy around 70% of the 100 short-haul jets it's planning to order at the new venture, Rajesh said at the World Travel Market tourism fair in London. Air Arabia Abu Dhabi may also serve Egypt, Turkey, Jordan and Lebanon, she said.

Air Arabia “categorically denies unfounded reports” regarding plans for the venture, it said Wednesday in response to the Bloomberg story. “We have not issued any official statement regarding our growth strategy nor has any official interview taken place.”

The airline said it will announce growth plans “when they are finalised and through our official channels.”

An Etihad spokeswoman referred a request for comment to Air Arabia.

Jet Airways, which was part-owned by Etihad, operated flights from nine Indian cities to Abu Dhabi before its demise, the executive said. Replacing those services will help feed vital traffic from the world's fastest-growing major travel market onto Etihad's long-haul planes as it works to halt losses that have totaled $4.8 billion over three years.

Air Arabia rose 6% on Oct. 17, when the Etihad venture was announced. The carrier has its main base in Sharjah and another in Ras Al Khaimah, two of the seven United Arab Emirates that also include Abu Dhabi and Dubai, as well units in Morocco, Egypt and Jordan.

Read More: Air Arabia Soars on Plan to Start Low-Cost Carrier With Etihad

To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tara Patel

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