Air Arabia did not even serve Abu Dhabi, home of Etihad Airways, before the pandemic hit. Today, the budget airline is the second largest at the United Arab Emirates hub, and a symbol of the shift underway at some of the Gulf’s busiest airports.
FlyDubai, Flynas, IndiGo, and Wizz Air, along with Air Arabia, have all participated in a dramatic share shift to low-cost carriers in Abu Dhabi, Dubai, and — to a lesser extent — Doha. The three cities are the largest airline hubs in the Gulf and traditionally the domains of legacy network carriers Etihad, Emirates, and Qatar Airways, respectively.
A new analysis from OAG finds that budget airlines have expanded their share of seats in all three hubs since 2019. The biggest shift has occurred in Abu Dhabi where discounters have gained nearly 19 points of the market for a 25 percent share this year. Low-cost carriers grew to 25 percent of seats in Dubai, and nearly 6 percent in Doha; an 8 point and 1 point share gain, respectively.
Over the same period, Etihad lost nearly 20 points of seat share in Abu Dhabi, Emirates 9 points in Dubai, and Qatar 4 points in Doha, according to Diio by Cirium schedules.
“It’s clear that while the legacy carriers have built these hubs, largely on the back of long-haul international connectivity, they have paved the way for [low-cost carriers] to now exploit a more established regional market,” according to OAG.
There are several things to unpack in OAG’s analysis. First, it reflects the dynamics of the pandemic airline recovery. Longhaul international travel has recovered slower, owing to travel restrictions in various countries, than shorthaul international. As a result, longhaul airline networks have recovered slower than shorthaul routes. That fact has limited, or at least slowed, the capacity recovery of longhaul, connection-oriented airlines like Emirates and Qatar, and benefitted the comeback — and growth — of budget airlines with largely shorthaul, point-to-point route maps.
In addition, the cost-conscious leisure and visiting friends and relatives travelers that discounters appeal to have been the fastest traveler segments to recover from the crisis.
Take India’s largest airline, IndiGo, for example. The carrier is scheduled to fly 10 percent more seats to the Gulf hubs this year than it did in 2019, Diio data show. In addition, it’s added 10 new routes, almost all of which connect second-tier Indian cities to the Gulf, like Kannur to Abu Dhabi, Mangalore to Dubai, and Tiruchchirappalli to Doha.
“I wish we had more airplanes right now, we will be opening international destinations all around us,” former IndiGo CEO Ronojoy Dutta said in August. He was referring to both destinations, and routes, to the Gulf, as well as other potential new international markets for India’s largest airline.
The biggest share shifts have occurred in Abu Dhabi. Hometown airline Etihad, which was struggling financially before the pandemic, has given and ceded — depending on how you look at it — significant ground to Air Arabia and Wizz, both of which only entered the market in 2020. Air Arabia Abu Dhabi, a joint venture between Air Arabia and Etihad, is the airport’s second largest carrier today with an 8 percent share of seats, and serves 24 destinations from the city, according to Diio. Kuwait City and Moscow Domodedovo join the airline’s network from Abu Dhabi before the end of the year.
Abu Dhabi Airports CEO Jamal Salem Al Dhaheri, in a September comment on Air Arabia’s one millionth passenger through the airport, said the airline’s growth highlights “the growing demand for low-cost travel.”
Wizz, which serves Abu Dhabi with both a local subsidiary and its main European operation, also has an 8 percent share of seats, according to Diio. The airline will serve 31 routes from the Emirati city by the end of the year, including new service to Samarkand, Uzbekistan, that begins in December.
“We are very excited about going East,” Wizz CEO József Váradi said in July referring to the growth of the airline’s Abu Dhabi, and planned new Saudi Arabia, subsidiary. He added that the carrier would “continue to expand” in Abu Dhabi.
It is unclear how much seat share budget airlines will hold onto in Abu Dhabi, Doha, and Dubai. Neither Emirates, Etihad, nor Qatar have fully recovered to their 2019 capacity levels, and thus have runway to regain some of their pre-pandemic market shares. But, as Al Dhaheri noted, demand is strong for discount flight options, which suggests low-cost carrier growth in the markets will stick.