Air Arabia Expands Fleet with Leased Aircraft as it Awaits Airbus A320neo Deliveries in 2025

Published on October 7, 2024

By: Tuhin Sarkar

Air Arabia, one of the Middle East’s leading low-cost carriers (LCCs), has embarked on a significant fleet expansion plan as it awaits the delivery of 120 Airbus A320neo family aircraft, with deliveries now scheduled to commence in the second half of 2025. The airline group, which operates across several brands including Air Arabia Abu Dhabi, Air Arabia Egypt, Air Arabia Maroc, and Fly Jinnah, currently manages a fleet of around 85 Airbus A320ceos, A321ceos, and A321LRs. This order is set to more than double its fleet size over the coming years.

While Air Arabia eagerly anticipates the arrival of its new jets, CEO Adel Ali revealed at Routes World 2024 in Bahrain that the airline has been leasing additional capacity to support its growth plans. Ali also shed light on the delays in the delivery timeline, the decision to hold off on early A320neo deliveries, and Air Arabia’s ambitious plans for regional expansion.

Leasing Additional Aircraft for Growth

Speaking at Routes World 2024, Adel Ali acknowledged that while Air Arabia’s 120 A320neo family aircraft are on order, the first deliveries have been postponed until late 2025. This delay, he explained, stems from supply chain challenges and a decision made by the airline to wait for the next-generation CFM LEAP engines, which are expected to bring improved efficiency and performance.

“We’ve been leasing quite a lot of aeroplanes from the market to grow the business,” Ali stated, although he did not provide specific details about the leasing arrangements. The airline group has turned to the leasing market to maintain its aggressive growth trajectory while awaiting the delivery of its new aircraft.

By leasing aircraft, Air Arabia has been able to continue expanding its route network and operational footprint without compromising service levels. This strategy has allowed the airline to capitalize on increasing demand for budget travel across the Middle East, North Africa, and South Asia, where Air Arabia’s low-cost business model has gained substantial traction.

Delayed A320neo Deliveries: Strategic Decision for Performance Gains

The Airbus A320neo family is well-regarded for its fuel efficiency, reduced emissions, and lower operating costs, making it a highly desirable aircraft for airlines worldwide. While Air Arabia initially anticipated earlier deliveries of its A320neo order, the airline made the strategic decision to delay the arrival of these aircraft until late 2024, with the first deliveries now expected in the second half of 2025.

The decision to delay was influenced by Air Arabia’s desire to ensure that the aircraft would be equipped with the next-generation CFM LEAP engines. These engines are expected to bring enhanced fuel efficiency and reliability, factors that are critical to Air Arabia’s long-term operational strategy. Ali explained that the airline preferred to wait for these engines to be thoroughly tested and proven in service before integrating them into its fleet.

“We decided to delay [the neo deliveries] until late 2024,” said Ali. “The reason for that is we’re waiting for the next generation of the [CFM LEAP] engines that will probably kick off this year, or early next year.”

Fleet Expansion with A321XLRs Scheduled for 2027

In addition to its A320neo order, Air Arabia is also set to receive Airbus A321XLR aircraft, with deliveries scheduled to begin in 2027. The A321XLR, which stands for “Extra Long Range,” will provide Air Arabia with a range of 8.5 hours, enabling the airline to operate longer routes without the need for refueling stops. This increased range opens up new possibilities for the airline to expand its operations beyond its existing markets.

Ali highlighted that while the A321XLR’s range is sufficient for transatlantic flights, Air Arabia’s current focus is on expanding its footprint within the Middle East, Africa, and Europe. He noted that the airline has no immediate plans to operate transatlantic services, instead looking to extend its network to South Africa and further into Russia.

“We don’t normally race to be the first people to operate an airplane. I’d rather have another airline try and test it, and if they work well, then we get to use them,” Ali said, expressing confidence in Air Arabia’s strategic approach to fleet expansion.

Expanding Regional Presence: Focus on the Middle East and Africa

One of the most exciting aspects of Air Arabia’s growth strategy is its expansion within the Middle East and Africa. With the increased range offered by the A321XLRs, the airline plans to reach destinations as far as South Africa and Eastern Europe. Additionally, Air Arabia is looking to bolster its presence in key markets like Morocco, which serves as a gateway to Europe and Africa.

“In Morocco, we will expect to come to the Middle East and further into Russia, and so on,” said Ali. The expanded fleet will allow Air Arabia to launch new routes that connect Morocco with untapped markets in the Middle East, Russia, and South Africa.

Closer to home, Air Arabia Abu Dhabi is playing an increasingly vital role in connecting the United Arab Emirates to regional destinations. The airline recently launched new routes to Turkey, Egypt, and Central Asia, catering to the rising demand for budget travel options among both leisure and business travelers.

Fly Jinnah: A Success Story in Pakistan

Fly Jinnah, Air Arabia’s newest airline brand, has quickly become a success story in Pakistan. Launched just two years ago, Fly Jinnah operates out of Islamabad and serves multiple domestic and international destinations. The airline has seen strong load factors and is performing well in a competitive market.

Ali noted that Fly Jinnah’s success is a testament to the airline’s ability to adapt its business model to different markets. He emphasized that Fly Jinnah’s success does not depend on the Air Arabia brand, and that the airline is thriving by focusing on underserved routes, particularly in northern Pakistan.

“We’re not going into where everybody is, which is Karachi,” Ali said. “We are developing more from Islamabad and the north. Again, we see huge potential, as we develop the business.”

Fly Jinnah’s approach to network development mirrors that of Air Arabia’s other brands, which have prioritized secondary cities and underserved markets. This focus on niche markets has enabled the group to avoid direct competition with larger carriers while capturing a significant share of budget-conscious travelers.

Looking Ahead: Future Growth and Expansion

As Air Arabia prepares to welcome its first A320neo aircraft in 2025 and the A321XLR in 2027, the airline is poised for continued growth. The group’s strategy of leasing aircraft while waiting for its new deliveries has allowed it to maintain a robust operational footprint while expanding into new markets.

Looking ahead, Air Arabia’s fleet expansion and focus on regional connectivity are expected to position the airline as a leading low-cost carrier in the Middle East, North Africa, and beyond. The airline’s decision to prioritize fuel efficiency and operational reliability with its new aircraft orders reflects a forward-thinking approach that will enable it to remain competitive in an evolving aviation landscape.