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Tue 7 Aug 2012 12:29 PM

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EXCLUSIVE: Air Arabia eyes more Russia routes

Budget carrier also says no plans for Saudi domestic market; reports 31 percent profit rise

EXCLUSIVE: Air Arabia eyes more Russia routes
Adel Ali, CEO, Air Arabia.

Budget carrier Air Arabia says it is considering launching new routes into Russia and CIS markets, the airline's CEO told Arabian Business, after last month increasing the frequency of its Moscow service due to high demand.

“We’re looking at a couple of new routes in CIS and Russia for winter. As soon as the formalities and paperwork is finished and we’re able to announce the names, we will," Ali told Arabian Business.

Air Arabia currently serves CIS (Commonwealth of Independent States) destinations including Ukrainian cities Kiev and Donetsk and Almaty in Kazakhstan. It launched its Moscow route in October 2011, increasing its frequency in July 2012.

“Russia overall is a very big market. For us we’re yet to discover a lot of points [there]," Ali said. "It’s not year-round - it’s more of a winter business. Moscow’s been good and obviously there’s a lot other airports in Russia that we will be looking at."

Ali said that Air Arabia would continue to add "three to four new points" to its flight network per year. In 2012 so far, the carrier has launched services from its hub in Sharjah to the Saudi Arabian city of Taif and Oman tourist destination Salalah, bringing its total number of routes to 75.

Air Arabia also operates from two smaller hubs in Morocco and the Egyptian coastal city of Alexandria, although the carrier this year scrapped plans to open a third one in Jordan due to political unrest.

Ali told Arabian Business that the plan remained on ice and there were no plans to revisit the proposal. "Jordan, we decided to shelf it because of the political situation... At the moment the plan for Jordan has not changed. In time we will review it from [the] start. If we find it's as promising as it was at the time we will look at it [again]. If we find we need to look at other hubs we will. We'll keep our options pretty open about this," he said.

Ali confirmed that Air Arabia was not one of 14 airlines to have applied with Saudi Arabia's General Authority of Civil Aviation [GACA] to begin domestic services in the Gulf state. "We fly from [the] UAE already into six airports in Saudi, and we've got an extensive operation. In terms of setting up a Saudi airline we've not applied, we're not part of [GACA's] list."

Air Arabia currently has on order 35 Airbus A320s due to be delivered during 2015-2016, which will take the carrier's existing fleet up to 65 aircraft. After this, Ali said fleet expansion would depend on market demand, but it could look beyond Airbus as its supplier. At the moment Air Arabia operates a purely Airbus fleet.

"Once this delivery's done we will continue to review our fleet plan... If the market continues to grow we will order more planes. Our options are open for not just Airbus, but Airbus and others, [it depends] on what at the time best suits us," he said. Asked if Air Arabia could purchase planes from Airbus rival Boeing, Ali responded: "Absolutely."

Air Arabia today reported a 31 percent increase in second quarter net profit to AED66m (US$18m) on the back of increased passenger traffic, the airline said Tuesday. 

Turnover for the three months ending June 30 increased 23 percent to AED729m while passengers rose 15 percent to 1.3m.

* Additional reporting by Claire Valdini

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