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Fri 1 Jun 2007 12:00 AM

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Air Arabia growth plan stunted

Air Arabia's plans to launch inbound holidays packages are being thwarted by the limited availability of hotel rooms in the UAE.

Air Arabia's plans to launch inbound holidays packages are being thwarted by the limited availability of hotel rooms in the UAE.

The Sharjah-based low cost carrier's outbound division, Air Arabia Holidays currently provides low cost holiday packages to most of the destinations served by the airline, but is yet to introduce inbound packages.

"Our holiday department is ready to launch [an inbound division], but to do this properly, the capacity of the hotels needs to be bigger," said Adel Ali, CEO, Air Arabia. "That is the limiting factor; hotel availability and not our readiness."

The Middle East's first low-cost carrier reported AED 43.4 million (US $11.8 million) profit for Q1 2007, a 33% increase compared to Q4 2006. The company plans to expand the size of its existing fleet from nine to at least 34 aircraft by 2016 and expects to receive two new aircraft before the end of this year.

Ali said the carrier would announce new routes to the Indian Subcontinent, Levant and the CIS by mid-summer and planned to up frequencies on existing routes, but extra services would not operate until later in the year when it had received new aircraft.

Ali also hinted that Air Arabia was looking to launch additional hubs within the Middle East and the Indian Subcontinent, but said that it had not yet reached the "talks" stage because "the law in most of the countries in the Middle East does not allow for foreign investment".

"Some of [the countries that] claim to be looking for foreign investment are reluctant to accept foreign investment in aviation," he said.

The carrier recently announced that it would build a 300-room hotel at Sharjah International Airport to be managed by Rotana, and has formed a new ground handling company with Sharjah Airport Authorities in a 50/50 venture. Recent developments at the airport include the opening of the new departures and arrivals areas and the ongoing construction of new aircraft aprons.

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