TBY speaks to Adel Abdullah Ali, CEO of Air Arabia, on factors of success, market trends, and the current competitive environment.
BIOGRAPHYAdel Al Ali is well known for being at the forefront of the development of modern aviation. His innovative achievements and contribution to air transport and tourism sector in the wider Arab world are globally recognized. He managed to transform Arab aviation in October 2003 when he set up Air Arabia, the Middle East and North Africa’s first low-cost carrier (LCC), opening up a market niche in the region whose existence few had suspected. Since 2007 and for five consecutive years, Adel has been awarded ‘Airline CEO of the year’ by various industry forums. He was named ‘World’s best Low Cost Carrier CEO’ during the World LCC Congress in 2008. He also entered the “Hall of Fame Award” in 2010.
Air Arabia is today the most successful low-cost carrier in the Middle East. What aspects of your company contributed to this success?
This is a reflection primarily of the effectiveness of our business model, which consists of a mass-market customer base and reduced operating cost structure. Customer comfort and convenience are top of our agenda and even as we focus on delivering greater value to our passengers we remain scrupulous in ensuring that this is done without compromising in-flight comfort. Additionally, Air Arabia's innovative multi-hub model is placed in strategic locations across the region, Sharjah, Ras Al Khaimah, Casablanca, Alexandria, and Amman, allowing us to maximize the range of our fleet and further extend our reach. Due to the fast pace and competitive nature of the sector, constant innovation is the key to survival and success. The ability to anticipate and adapt quickly to changing demands and market trends is very important. At Air Arabia, we ensure that innovation is integrated into our core processes and strategic agenda. Every innovation we make informs and complements value-for-money air travel, which is at the heart of our business.
The aviation sector in the Middle East is now the fastest growing in the world. In terms of your medium-term outlook on the sector, do you see it heading toward further steady growth over the next decade?
We remain highly confident of the medium to long-term prospects for the regional aviation industry, especially the low-cost carrier model. The GCC, in our view, represents a particular sphere of opportunity for low-cost carriers, especially when we consider that approximately 2 billion people live within a four-hour flight time of the region. Carriers across the board are investing in expanding their fleets and route networks. Air Arabia alone operates a fleet of 44 new Airbus A320 aircraft, with more scheduled for delivery, serving more than 120 destinations across the Middle East, North Africa, Europe, the Indian Subcontinent, and Asia—a figure that is set to rise exponentially in the coming years. Air Arabia's journey toward becoming a leading budget airline internationally is an ongoing one, and our steady growth and expanding international presence over the past decade is a firm indication that we are making rapid progress toward achieving this goal. If we can keep maintaining our level of operational efficiency and our pace of business growth and market expansion, I would like to believe that the day when Air Arabia is present in almost all international markets is not far away.
What are the key differences between operating private and state-owned airline companies, and what are the challenges that you face in competing with them?
Generally speaking, state-owned airlines have an inherent advantage in terms of access to capital and they also enjoy the comfort of a safety net to fall back on. That said, these are no guarantees of success in an industry where efficiency and strategy are fundamental to sustained performance. Effectively, both business setups need to focus on the customer and the quality of service. It is also about the efficiency with which you are able to implement a business strategy while keeping up with an evolving marketplace. Having achieved profitability in the very first year of its operations, Air Arabia has maintained a consistent track record of profitability and growth over the last decade. Competition naturally helps spur innovation and tests the resilience of airline industry players and their ability to survive and thrive in a crowded field. Air Arabia has consistently proven its resourcefulness in successfully navigating the struggles of a competitive marketplace. We pioneered the low-cost aviation concept in the Middle East; it was the success of our low-cost model that encouraged others to enter the market and forced other airlines to revise their pricing. Air Arabia is also the first and only Arab airline to list publicly.
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