Air Arabia to open second hub in Morroco to serve Europe, Middle East and Africa

Published November 11th, 2007 - 07:43 GMT

Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa, announced today that it will establish its second hub in the Moroccan capital, Rabat, providing the Sharjah-based LCC with a platform from which to reach into the wider Europe, Middle East and Africa (EMEA) market. This announcement follows the signing of a management agreement between Air Arabia and Regional Air Lines, the leading private carrier in Morocco.

Under the terms of the agreement, Air Arabia will assume management control of the Morocco-based carrier. Air Arabia will apply its successful business model to the management Regional Air Lines.

Together with Air Arabia, Ithmaar Bank, a Bahrain-based investment bank with global reach, will provide a significant capital injection for the Morocco-based carrier and join Air Arabia and Regional Air Lines as partners in the newly created company.

Sheikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia, said: “Air Arabia is currently in the midst of a period of rapid expansion. This agreement provides us with the opportunity to reach into fast-growing markets in North Africa and across the Mediterranean into southern Europe. With a strong presence in the Egyptian cities of Alexandria, Luxor and Assiut, Air Arabia will now be able to expand significantly this coverage area across the EMEA region.”

Mohamed Hassan Ben Salah, Chairman, Regional Air Lines, said: “This agreement marks an important and natural next step in the evolution of Regional Air Lines, which was founded a decade ago to meet the needs of travelers within Morocco and in southern Europe. In partnership with Air Arabia and Ithmaar Bank, we will provide travelers in Morocco and across the EMEA region with far greater choice in selecting efficient and cost-effective travel solutions. Considering that Morocco expects to welcome an estimated 10 million tourists a year by 2010, this is an especially timely announcement. There is also a very large Moroccan diaspora, particularly in Europe, who will benefit when traveling between the Continent and the Kingdom.”

Khalid Abdulla-Janahi, Chairman of Ithmaar’s Board of Directors, said: “Given the financial strength and operational excellence of Air Arabia and the proven track record of Regional Air Lines, we see this agreement as an ideal way to strengthen both carriers. The seamless integration of the operations of the two airlines – along with the financial expertise provided by Ithmaar Bank – will lead to new synergies that will benefit all the partners.”

Ithmaar Bank is serving as the financial advisor and financier for the transaction.

About Air Arabia: Air Arabia (PJSC), listed on the Dubai Financial Market, is the Middle East and North Africa’s leading low-cost carrier (LCC). Air Arabia commenced operations in October 2003 and currently operates a fleet of 10 new Airbus A320 aircraft, serving 37 destinations across Middle East, North Africa, Indian Subcontinent and Central Asia through its main hub in Sharjah, United Arab Emirates.

Air Arabia is modeled after leading American and European low-cost airlines, and its business model is customised to accommodate local preferences. Its main focus is to make air travel more convenient through Internet bookings and offering the lowest fares in the market along with the highest levels of safety and service standards.

About Regional Air Lines: Regional Air Lines, launched in 1997, is the leading private airline in Morocco. With the objective of becoming the first airline to set up a regional network from its hub in Casablanca, the carrier has grown organically over the past decade to expand its coverage area to include nearly all major urban centres in the Kingdom and four destinations in the southern European nations of Spain and Portugal. The carrier operates a fleet of 10 aircraft and employs 230 staff of 15 different nationalities.

About Ithmaar Bank: Ithmaar Bank B.S.C. is licensed by the Central Bank of Bahrain and listed on the Bahrain Stock Exchange ('ITHMR'). It has a total equity of $1.1bn and is a full investment bank with its direct business covering the Middle East and North Africa (MENA) region, as well as South Asia, Asia-Pacific and Europe. Besides holding significant investments in the banking, financial services and real estate sectors in different markets, the main activities of the Bank include underwriting (equity and other financings), private equity (structuring, participation and portfolio management), Islamic financing, private banking, and advisory services covering project financing, investments, capital markets and mergers & acquisitions.

Ithmaar Bank's flagship subsidiaries and affiliates include Shamil Bank of Bahrain, Solidarity (an Islamic insurance company, headquartered in Bahrain), Faisal Private Bank (Switzerland), Faysal Bank Limited (Pakistan), First Leasing Bank and Ithmaar Development Company.



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