LCC Air Arabia CEO Talks Strategy and Lessons Learned

Air Arabia CEO Adel Abdullah Ali founded the group in 2003, setting up the Middle East and North Africa’s first LCC. Today the Sharjah-based airline flies to more than 170 destinations in the Middle East, North Africa, the Indian subcontinent, Central Asia, and Europe, with airlines operating in the United Arab Emirates, Egypt, Morocco and Pakistan. This interview was conducted at Routes World in Bahrain, in early October.

Air Arabia has grown beyond a single airline—it’s a group with subsidiaries and joint ventures like Air Arabia Morocco, Abu Dhabi, Egypt, and Fly Jinnah in Pakistan. Could you share the strategy behind this structure? When we launched Air Arabia 21 years ago, the goal was simple—make air travel affordable and accessible. We looked at successful LCCs in the US and Europe and adapted that model to the Arab world, where countries are smaller and populations more dispersed. We needed a brand that could work from Morocco to Muscat, and that’s how we structured our airline.

The key difference for us is that, from the start, the LCC business model was not well-known in this region. Legacy airlines dominated, and the perception of low-cost was quite negative. There were also operational challenges—many airports weren’t fully prepared for LCCs, and in some cases, they charged us higher fees even though we needed fewer services. In the last 20 years, some airports have adapted, and some haven’t. To make this work, we created separate businesses for support functions like engineering, catering, and IT systems, and each operates as a standalone company with its own management. This way, we keep things streamlined at the group level while each subsidiary operates its AOC based on local market requirements.

How did you overcome early skepticism in the market? I come from a legacy background, having worked for British Airways and helped develop its premium products. But what I saw in this region was a need for affordable travel. At that time, if you weren’t part of the wealthy elite, you might only fly once a year, if you were lucky—sometimes not even that. Legacy airlines were charging exorbitant prices for short flights. We saw the opportunity to create an airline that was affordable and could stimulate the market.

From day one, the demand was there. People wanted to travel, and they quickly embraced the low-cost model. Over the last 20 years, aside from during the pandemic, our seat load factor has never dropped below 82%.

And you’ve also achieved strong yields? The yields have been strong. Once the business model was in place and we educated the market, things started to click. People initially had misconceptions like, “Do you even have seats on the planes, or do people stand?” But over time, with the help of the media, people understood what we were offering.

In terms of positioning, we focus on providing competitive pricing with a good level of service. Our aircraft are configured to offer food onboard, but it’s affordable, and we give customers choices. We aren’t offering an ultra-low-fare, bare-bones experience where you don’t even get a glass of water. Instead, we provide a service where you pay for what you want, and we’ve kept that model successful for 20 years.

Air Arabia has 120 aircraft on order, which will more than double the size of the airline. How will you deploy these new aircraft? We have grown to about 85 aircraft and have been leasing planes in the meantime, because deliveries from the OEMs have been slower. The 120 aircraft coming in are all part of the [Airbus] A320 family—A320neo, A321neo, and A321XLR models, which will give us a longer range.

We started with a four-hour range, but with the new aircraft, we can go farther. We’re already flying seven hours into Europe and East Asia, and with the XLR, we’ll be able to reach destinations eight or even eight-and-a-half hours away. This allows us to expand into new markets like Thailand and Kuala Lumpur from our existing bases.

Our approach is to continue organic growth. In Egypt, for example, there’s a lot of untapped potential, and we’re also expanding Fly Jinnah in Pakistan. Pakistan is a huge market, and Fly Jinnah has been very successful. It’s still early days, but we see tremendous potential there.

What lessons have you learned over the past two decades? I have three key messages—for airlines, airports, and governments. For airlines, keep it simple: we’re in the transportation business, moving people from point A to B. Don’t overcomplicate things. For airports, be open—for me, airports are like bus stops; do not stop busses coming in and do not make it difficult for them to operate. Airports that welcome LCCs grow their traffic, and we’ve seen examples of that around the world. However, some airports in the Arab world and CIS [Commonwealth of Independent States] region still overcharge LCCs. They need to choose whether they want to open the door and welcome LCCs, or if they want them to go somewhere else. And for governments, embrace open skies. Wherever airspace has been liberalized, the industry has flourished.

Looking ahead over the next decade, do you envision more hubs and subsidiaries, or will you focus on growing your existing ones? I’m pragmatic. My goal is to do what makes sense financially for our shareholders. If we need more hubs, we’ll create them, but we’ve also learned from past mistakes where we’ve had to close down operations. By 2034, I imagine we’ll have more hubs, especially given how well Fly Jinnah is performing under a different brand in Pakistan. Our approach is to avoid complexity while seizing new opportunities as they arise.