Some governments in the Arab world put a higher priority on expanding their aircraft fleets than looking at more important issues, said Air Arabia CEO Adel Ali. Talking to journalists on Tuesday, Ali said that increasing competition in the region will force several low-cost carriers to go bust.
“Obviously the legacy carriers will not close down because they are owned by governments. So probably instead of building hospitals and schools, they will buy more aeroplanes, in this part of the world,” he added.
“They [local low-cost carriers] are all busy, but not all of them are successful. They’re all carrying people, and some are doing it for good reasons – to improve business, for example – but some are doing it simply because they love to have another airline.”
Ali also said that the growing number of aircraft in the region — GCC alone is responsible for 30 percent of the world’s aircraft order book – plus extra competition means that some of the eight Gulf low-cost carriers will go out of business. “I hope that people look at this business not just as a marathon race to see who will have the biggest and most planes.”
Air Arabia was the region’s first low-cost carrier when it launched six years ago. The carrier’s full-year results for 2009 showed that profits were down by 11.3 per cent to $123m, still higher than had been predicted by analysts. Turnover in 2009 fell 4.5 per cent to $544m.
