Wizz Air To Launch Low Cost Carrier In Abu Dhabi

Filed Under: Etihad

Apparently ultra low cost carriers will be in vogue in the UAE in 2020. In October 2019:

Now it looks like Abu Dhabi is getting a second low cost carrier?

Wizz Air To Form An Airline In Abu Dhabi

Today the Abu Dhabi Developmental Holding Company (ADDH) has announced a preliminary agreement with Wizz Air Holdings, to launch a low cost carrier in Abu Dhabi.

The airline will be formed via a joint venture, with operations expected to launch in the second half of 2020. Wizz Air has one of the most fuel efficient fleets in the world, thanks to their Airbus A321neos, and the number of seats they cram on planes (which is why they shame other airlines for offering business class).

The plan would be for the airline to first launch routes to Central, Eastern, and Western Europe, and then later add markets like India, Africa, and the rest of the Middle East.

With this, Wizz Air hopes to have access to a market of five billion passengers (basically the entire world except Australia, North America, and South America).

Wizz Air CEO, József Váradi, has said the following:

“Wizz Air Abu Dhabi will be an incremental path of growth for Wizz Air, built on our successful ultra-low-cost business model, bringing affordable travel to ever more customers. We believe the new airline has the potential to be a significant player in the region.

ADDH’s deep-rooted knowledge of the local market, support and navigation in a new market for Wizz is invaluable and will boost the successful development of this low-cost airline.”

Currently Wizz Air’s only UAE flights are to Dubai World Central Airport, as the airline flies year-round to Bucharest and Budapest, and seasonally to Cluj, Katowice, and Sofia. It will be interesting to see whether those routes transfer to Abu Dhabi, or if this growth is all incremental.

What Is The Government Trying To Accomplish?

This is downright bizarre. Government-owned Etihad Airways is struggling and has lost over five billion dollars in the past few years, as they look to restructure. It was already announced that Air Arabia would set up shop in Abu Dhabi as part of a joint venture with Etihad.

Etihad has lost billions of dollars

Now the Abu Dhabi Developmental Holding Company is setting up a joint venture with Wizz Air. Sure these are technically different organizations, but the money is all coming from the same place.

They do realize that this will put downward pressure on Etihad fares and be bad for that “investment,” right?

I’m not sure if the government thinks that setting up low cost carriers will stimulate demand for tourism to Abu Dhabi, rather than just driving downward pressure on fares. Maybe that’s not totally off base, because with fares that are cheap enough maybe it will stimulate some visits to the UAE.

Still, two low cost carriers forming at once?!

Bottom Line

In the past couple of months, three different low cost carriers have announced huge expansion in the UAE, with two setting up hubs and forming joint ventures in Abu Dhabi. I’m highly skeptical of all of these actually happening, just as I’m highly skeptical of Iceland’s two new low cost carriers launching operations in the near future.

I’m not sure what exactly the Abu Dhabi government is thinking here. They’ve lost billions of dollars with Etihad and are trying to turn that around, and now they’re launching two separate low cost carriers that will surely drive down yields at Etihad?

Comments
  1. In the UAE, we’d have Emirates, Etihad, AirArabia, FlyDubai, Etihad and AirArabia’s LCC, SpiceJet and now Wizz. All our airports are within an hour and a half’s drive. Good lord, 7 UAE-based airlines serving a country with a population of 9 million

  2. I swear, these Emiratis are a special breed of stupid when it comes to aviation. They’re going to kill their own aviation industry with the intense pressures they keep layering on their own existing carriers with these new startup ventures. If they kill the industry, it kills tourism and thus puts these idiots back on the humps of camels. It’ll truly be a site to behold when the country goes full circle in the span of 50yrs because of yet another ill-conceived venture. What better way to welcome Expo 2020 then to see one or two airlines fail because of another wonderful vision by their wise leaders?!?

  3. Getting ready to dump Etihad or merge them with Emirates perhaps?

    Wizz knee cruncher special A321 would probably work well for flying in workers to AUH, plus some low end tourists.

  4. Anyone else finding is absurd that Wizz air slams other carriers for offering business class yet they launch a new airline which will in total only increase the number of flights in the world further? The hippocrisy.

  5. @Juan

    True. And further, Wizz Air is also a special of breed stupid. Imagine bad-mouthing premium class travel one week and then setting up your trashy LCC ops in a Gulf state the following week. Wizz Air will service the migrant worker demographic but Emiratis will continue to stick to their national carriers. How dumb to insult your business class loving hosts in a region addicted to conspicuous consumption.

  6. Makes sense, midfield will be opening next year, need to fill the gate capacity.

    Etihad will be positioned as. premium boutique airline and both ULCC and LCC will operate for the migrant and low wage workers and some of the eastern EU tourists.

    segmentation of PAX to these makes sense, and is in line with the EY narrow body fleet stripping TVs etc to be placed on these routes with wide bodies remaining in EY livery and full service.

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