Just two months after Air Arabia announced it would establish a low-cost airline at Abu Dhabi International Airport, Wizz Air is following suit and revealed on Thursday it reached an agreement with Abu Dhabi Developmental Holding Company (ADDH) to jointly establish a discount carrier in the UAE’s capital. The partners did not disclose how much of the capital they each will own in the joint venture, which will trade as Wizz Air Abu Dhabi and operate a fleet of Airbus A321neos.  Wizz Air Abu Dhabi will become the Budapest-based LCC’s first airline established outside of Europe.

“ADDH's deep-rooted knowledge of the local market, support, and navigation in a new market for Wizz is invaluable and will boost the successful development of this low-cost airline,” said Wizz Air CEO József Váradi. He described the venture as “an incremental path of growth for Wizz Air, built on our successful ultra-low-cost business model, bringing affordable travel to ever more customers.”

Through the Wizz Air partnership, ADDH aims to “capitalize on the growing demand for budget travel and support the continued growth of Abu Dhabi as a world-class cultural and tourist destination,” said the body’s chief executive, Mohamed Al Suwaidi.

The new airline aims to start operating in the second half of 2020 and focus on establishing routes to markets in which Wizz Air maintains “existing, high-growth operations,” namely Central, Eastern, and Western Europe, as well as the Indian subcontinent, the Middle East, and Africa in the longer term, Wizz Air noted in a regulatory statement. It did not reveal initial routes and the airline will need to fulfill all regulatory requirements of the UAE General Civil Aviation Authority to obtain an air operator's certificate (AOC).

The arrival of Wizz Air Abu Dhabi and Air Arabia Abu Dhabi will likely challenge the leadership position of Dubai International Airport in the country. In contrast to Dubai International, which operates at near full capacity, Abu Dhabi’s airport holds spare space as authorities based its development plans—its new midfield terminal opens in 2020, increasing the airport’s capacity by up to 45 million passengers per year—on the continued growth of Etihad. The airline, however, in 2017 entered a downsizing process after accumulating heavy losses due to an unsuccessful strategy of inorganic growth through minority stake investments in global airlines, several of which went bankrupt. 

Etihad will partner with Sharjah-based Air Arabia in Air Arabia Abu Dhabi as part of its shift of focus on point-to-point rather than hub-and-spoke traffic. Asked by AIN whether the launch of a second Abu Dhabi-based LCC might affect its low-cost plans, the airline stated: “Our home city, the UAE, and the wider region will only benefit from the increased low-cost travel options that will be offered to and from the capital in 2020, including those presented by Air Arabia Abu Dhabi.”