Air Arabia exports LCC model to Nepal

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

Air Arabia signed a joint venture agreement with Yeti Airlines and received approval from Nepal Government’s Department of Industries (DOI) to form a Kathmandu-based low-cost carrier called Flyyeti.com.

Flyyeti.com’s business plan shows Sharjah in UAE as the first destination before serving Bangkok in Thailand, Doha in Qatar, Delhi in India and Kuala Lumpur in Malaysia from Kathmandu.

Air Arabia is looking at exporting its successful low-cost business model in Asia and aims to establish a new hub in the Nepalese capital, Kathmandu, providing a platform from which to serve markets stretching across South and Central Asia, the Far East, Middle East and Indian Subcontinent.

Air Arabia said its Nepali joint venture has a capital of Dh184m ($50 million). Under the terms of the agreement, Air Arabia is a major shareholder in the new company that it is headed by Air Arabia’s director of strategy and planning, Donald Hubbard, as chief operating officer.

“With this new hub in Nepal, Air Arabia will cover a new niche market, while continuing to offer the level of superior service that has made us one of the premier airlines in the Middle East,” said Sheikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia.

The new carrier started operations a week ago using a Boeing 737-800 on wet-lease from Spain’s Futura International Airways. A second aircraft is expected next month.

However the carrier is expected to operate an Airbus A320-200 fleet that will be transferred from Air Arabia.

In an interview with CAO, Air Arabia’s CEO Ali Adel says “mainly, the delivery of purchased A320’s will be serving Sharjah base.”

The Sharjah-based carrier currently operates 10 aircraft of the type and has recently agreed to add four additional aircraft from AerVenture. Its business outlook 2007-10 shows another three aircraft to join the fleet this year. By 2010, Air Arabia plans to operate a 19-aircraft fleet.

Outlook through 2010 also includes establishing an additional hub, now identified as Kathmandu, which will fly 1.4 million passengers to 20 destinations. Air Arabia expects to operate six A320-200s through the hub by then.

Ali says Air Arabia aims on growing the airline fleet to over 50 aircraft by 1015, in which more aircraft will be aliened for other hubs.

Source: Commercial Aviation Online, flightglobal.com's sister premium news site