INTERVIEW: Adel Al Ali
Adel Al Ali, CEO of the region’s first low-cost airline, Air Arabia, talks expansion plans and dealing with increasing competition.
June 27, 2012 11:15 by kippreport
How does increasing hubs and expanding services fit into your LCC business model?
I think there are two separate items. I guess we have an airline that was started here in the UAE in Sharjah. And our business model is very simple. The definition of a low-cost airline is a non-congested airport where people can get in and out quickly. Sharjah was not congested, and fitted the criteria, and then you need a good catchment area of business passengers, and again Sharjah has got more than a million people living in it with the whole of the Northern Emirates – a good catchment from Dubai. It is quite nicely located for business, hence coming back to our strategy we developed that business and we fly to wherever we need to fly within the perimeters of a low-cost business model. Now we have a brand name that is very universal. Air Arabia can be anywhere in the Arab world, so logic told us that the eastern part of Arab world is the UAE, with Muscat and Yemen nearby, so we have got a very good hub in Sharjah. And then, the other extreme end of the Arab world is Morocco and after that is the Atlantic Ocean. Morocco gets some 10 million tourists every year. There are five million Moroccans who live in Europe and travel back and forth; it has got multiple airports and the name Air Arabia in another Arab country works – so we did that. And then, we wanted an area in the Middle East with a similar demography, we looked at Egypt. It has close to 85 million people and has multiple airports, so I think that is the strategy or the objective in the long-term for a customer to find a seamless level of service through any airports in the Arab world to be able to fly. The Arab world is going through lot of changes. We are yet to see what this change is about. Hopefully, this change will bring something good from a business perspective.
If you think about flying anywhere or into the Arab world, Europe or into the Indian subcontinent or Africa, you will be able to jump on the same single airplane. You don’t feel different: one system, one service, one type of airplane. That is the objective and I think that’s where we set up two hubs. If in the future, business opportunities come, we will look at them. It is not about the race of numbers, but about adding to something that the customer can benefit from and also whether increasing hubs is commercially viable.
Would you be interested in opening a hub in the Far East?
Absolutely, the geography is not a boundary. But what is a boundary is that you have got to be very focused on why you are doing and where you are doing it. The brand name “Air Arabia” you can’t just put it in any other part of the world, so it doesn’t make sense. Also, wherever you want to expand your business, there is a need you want to expand your business.
In Southeast Asia, the aviation sector and LCC sector is very good and very competitive. Therefore, our eyes are open for business opportunities. Hence, at the moment, the best place for Air Arabia is around the 300 million people that are in the Arab world and the opportunity to work in the Arab world.