Air Arabia to buy 10 more Airbus A320 planes for its new hub in Morocco

Air Arabia, the low-cost airline based in Sharjah in the United Arab Emirates (UAE), has signed a contract with the European aircraft manufacturer Airbus Industrie for 10 additional, single-aisle A320 aircraft to serve its new hub in Casablanca, Morocco.

The deal, worth about $770 million in list prices, follows an earlier agreement for 34 Airbus A320 aircraft, Airbus’ most popular model, signed at the end of 2007, a statement from Air Arabia said. The deal also confirms the carrier’s announcement in the third quarter of 2008 to order or lease additional Airbus A320 aircraft to support its operations at the new hub, it added.

Air Arabia’ move is seen by aviation analysts as a big push by Gulf Arab carriers to expand their fleets and route networks at a time when airlines elsewhere in the world are either shrinking or collapsing.

Air Arabia, the biggest budget airline in the Middle East, operates scheduled services to destinations in the Middle East, North Africa, the Indian subcontinent and Central Asia. Its main base is Sharjah International Airport. The five-year-old Air Arabia is a member of the Arab Air Carriers Organisation.

Air Arabia had ordered 34 Airbus A320 planes, and 15 options, at the Dubai Air Show held in November 2007.

According to the statement, Air Arabia will start operations from its second hub in Morocco in early 2009, subject to government approval, with the launch of a new airline called Air Arabia Maroc.

Air Arabia’s hub in Casablanca, Morocco, the statement added, was “aimed at providing the airline with a platform from which to reach the wider Europe, Middle East and Africa markets.”

At present, Air Arabia Air Arabia serves a network of 44 destinations across the Middle East, North Africa, Indian Subcontinent, Eastern Europe and Central Asia with 16 (leased and owned) Airbus A320 aircraft.

In the statement, Sheik Abdullah Bin Mohammed Al Thani, chairman of Air Arabia, said: “Our vision is to be one of the world’s leading low-cost carriers in terms of profit margins, innovation, reputation and operational excellence, and having the Airbus A320 at the heart of our fleet is the best and quickest way we can achieve this.”

The Australian newspaper International Herald Tribune quoted an aviation analyst at the Dubai-based investment bank Shuaa Capital as commenting: “Air Arabia’s rapid growth comes amid an explosion of air travel within the Middle East. That has fuelled strong demand for new planes – even as cash-strapped carriers in the United States and Europe shrink their fleets to stay afloat. Let us not forget that the Middle East is a market that is under-penetrated. To Air Arabia, it is just a part of their growth plan going forward.”

In July 2008, Etihad Airways, based in Abu Dhabi, the capital of the United Arab Emirates, had placed an order for as many as 100 Airbus and Boeing planes worth $20 billion at list prices at the Farnborough International Airshow in Hampshire, England.

Middle East-based carriers such as Qatar Airways, FlyDubai and Saudi Arabian Airlines also had placed orders at the Farnborough International Airshow.