Air Arabia Abu Dhabi announces Dhaka and Kabul; network strategy with Etihad clearer

Air Arabia Abu Dhabi has revealed its third and fourth destinations from the UAE capital: Dhaka and Kabul.

These complement its initial routes to Alexandria and Sohag, both also primarily for VFR reasons, that began last month.

Neither the Bangladesh nor the Afghan capital is currently served by Etihad.  This – together with the types of market Air Arabia Abu Dhabi is targeting – helps to better understand the role of the Etihad – Air Arabia joint-venture at its broadest level.

Dhaka has seen big cuts…

Dhaka is an important market from the UAE because over 500,000 Bangladeshis live in the country, together with strong traffic over UAE hubs.

Yet Abu Dhabi – Dhaka seat development has been tumultuous, ending last year with just over 236,000 two-way seats – down by 44% YOY – because of Etihad ending the route in September 2018. 

To put that into context, Sharjah – Dhaka had over 130,000 more seats than Abu Dhabi – Dhaka, OAG Schedules data shows.

Etihad operated the airport-pair once-daily using 412-seat B777-300ERs, its densest configuration of the type – which is unsurprising given the lack of premium demand.

Source: OAG Schedules Analyser.

… with a strong increase in fare

The exit of Etihad pushed the average fare up by 56% YOY from just $125 one-way (excluding taxes and 20-30% fuel surcharge) to $195 last year, OAG Traffic Analyser data indicates.

Since Etihad ended the route, Biman Bangladesh has been the sole operator, typically with a six-weekly offering. 

While currently unbookable on Biman’s website because of coronavirus, OAG data shows a six-weekly service by the carrier from next month using B777-300ERs.  Of these six, just one is non-stop; the rest are either via Chittagong or Sylhet. 

Kabul, meanwhile, was last served in 2013 by Safi Airways on a four-weekly basis using A320s.

Of Air Arabia Abu Dhabi’s first four destinations, Dhaka was ‘expected’. 

Air Arabia Abu Dhabi’s network strategy clearer?

Just before Christmas last year, Air Arabia Abu Dhabi filed its initial route network with OAG – all with Etihad codes – comprising 11 destinations.

Of the airline’s current network, only Dhaka was listed.  Yet these 11 are instructive.

All 11 – shown in the table below – were either previously served by Etihad or unserved from Abu Dhabi, and all are already served by the Air Arabia Group (enabling stronger deals, awareness, and economies). And most are VFR-driven and within a five-hour radius of the UAE capital.

But it is also likely that Air Arabia Abu Dhabi will not just launch routes that were previously served by Etihad with its higher cost base and need for higher fares.  

Depending on how coordinated the two carriers become, Air Arabia Abu Dhabi may well enable multiple brand-new routes that Etihad could not feasible operate itself beyond VFR-orientated markets.

Big schedule gaps for Air Arabia Abu Dhabi’s initial aircraft…

Looking at the schedule of Air Arabia Abu Dhabi’s first two aircraft, there are big gaps in scheduling, with various new routes likely to be announced soon. 

… so, Iraq next? 

Of the 11 routes mentioned above, it is highly likely some – like Dhaka – will materialise. 

Yerevan is now very improbable given Wizz Air Abu Dhabi will operate it on a twice-weekly basis from October, although Tbilisi may happen because Wizz Air will only serve Kutaisi.

In the past few years, Etihad has cut several routes, including the following.

It is possible that some will be served by Air Arabia Abu Dhabi, although it is unlikely that Dar Es Salaam, Entebbe, or Venice will.  The exception is unless the carrier’s role with Etihad changes to more of a flydubai – Emirates partnership, which is now “almost a merger”.

Replacing Jet Airways to Abu Dhabi?

Subject to strict bilaterals, Air Arabia Abu Dhabi may also replace Jet Airways on India routes, namely Goa, Lucknow, Mangalore, and Pune, all highlighted in yellow on the following map. 

These existed because of the defunct Indian airline’s partnership with Etihad given Eithad’s equity stake it in and all are now unserved from Abu Dhabi. However, only Goa is currently served by the Air Arabia Group.

Other possibilities include Addis Ababa, Mashhad, Sialkot, Shiraz, and Trichy.  All are unserved from Abu Dhabi, and all but Addis Ababa and Trichy are in the Group’s existing network.

Trichy, for example, had indirect traffic volume of 17,000 from Abu Dhabi last year.

Yellow = former Jet Airways routes, that weren’t also served by Eithad, to/from Abu Dhabi. Source: OAG Mapper.