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Air Arabia prepares to launch a new Jordan-based airline as Royal Jordanian posts another loss

Analysis

Cross-border low-cost carrier joint-ventures are prolific in Asia but are starting to gain ground in the world's latest LCC markets: the Middle East and Africa. Sharjah, UAE-based Air Arabia has foreign bases in Morocco and Egypt and intends to open its Jordan base around May-2015, Air Arabia CEO Adel Ali told CAPA at its recent Airlines In Transition conference in Dublin. Air Arabia took a minority 49% stake in existing Jordanian carrier Petra Airlines and intends to initially focus on destinations within the Middle East/Levant and later Europe.

Air Arabia Jordan will be able to "join the dots" and receive synergies from serving destinations already reached by other Air Arabia brands. Air Arabia Jordan plans to launch with two A320s and future growth is unclear.

Air Arabia has mostly focused on its UAE operation, which has 36 A320s. Air Arabia Maroc has four and Air Arabia Egypt has one. Although there are fleet benefits to being part of a group, these small sizes are sub-scale. Air Arabia Jordan's growth will be important for Jordan to meet tourism targets, but could be an unwelcome competitor to Royal Jordanian, which has reported another annual loss as it grapples with regional instability.

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