Making it work

When Adel Ali launched Air Arabia four years ago he was told it would never work. Today he runs a fleet of 17 aircraft which fly to 40 destinations worldwide. Tamara Walid discovers the secret to his success.

For Adel Ali, there's little more painful than failure. And failing this time would have been excruciatingly painful. "So I had to make it work," he says.

Over four years ago, all Ali heard was 'this is not going to work in the Middle East' and 'people will never travel on such an airline' and even, 'you will close down in three months'.

It was these exact remarks that made him thrust forward and make a decision to defy all expectations. Shortly afterwards the region's first budget airline was launched; Air Arabia.

"What makes me happy is that all those aviation experts that said 'this will not work' are actually making their own low-cost airlines now," says the CEO.

Today, almost five years on, Ali is still convinced he's done the right thing, even as new challenges arise. And not just any challenges.

Recently, Emirates Airline, the largest Arab carrier and the world's fastest growing, announced plans to start a low-cost airline within a year to tap into the growing market. Ali doesn't seem to think this poses a threat to Air Arabia and other low-cost airlines.

"Emirates launching a low-cost carrier is positive for me in the sense that at least it tells the cynics in the region that we have been doing the wrong thing in the last five years," he says.

Air Arabia has grown from being a two-plane airline to having a fleet of 17 airplanes by the end of 2008, in less than four years.

"We will be adding at least five or six airplanes per annum in the next five years so we are looking at a fleet of 50 airplanes by 2015, 2016," says Ali who believes he's setting a very realistic target.

He adds: "That's not taking it too bullishly. It's a conservative scenario that I think will meet our growth; but a sensible growth."

Overall the last year has been a good one for Air Arabia, according to Ali. The airline waved goodbye to 2007 with 37 destinations under its belt and reported a net profit of US$102.4m, compared to US$27.5m in 2006.

The airline had also sealed a US$3.5bn deal with Airbus for 49 A320 aircrafts during the 2007 Dubai Air Show. Delivery of the aircraft is expected to start in 2012 and end in 2015.

This year, Air Arabia received an additional three A320s and is expecting a fourth delivery this month. The aircraft will help the carrier meet its plans of opening up to four new routes by the end of 2008.

And even though Ali refuses to admit it, the airline's expansion is timely and essential to stand up to the challenge presented by the arrival of Emirates' new low-cost carrier. Ali insists that Air Arabia's strategy remains unaffected by the upcoming launch.

"We've always had our strategy and will continue with what we have. Anyone in the transportation business is our competitor. We look at buses to aircrafts and we will continue to do that," he says.

Last November, Emirates made an order of US$23.4bn for aircraft from Airbus and Boeing, with options for 50 more, valuing the total potential order at almost US$35bn.

The Emirates' new carrier will be the region's sixth in the low-budget sector and will mainly compete with Air Arabia, which has become the Middle East's largest low-cost airline.