Etihad Aviation Group, the owner of Abu Dhabi’s Etihad Airways, and Sharjah-based low-cost carrier Air Arabia have announced the signing of an agreement to launch Abu Dhabi’s first low-cost airline.

Air Arabia Abu Dhabi will be an independent joint venture company that will operate as a low-cost passenger airline with its hub at Abu Dhabi International airport. It is intended to complement Etihad Airways’ services from Abu Dhabi and will cater to the growing low-cost travel market segment in the region.

In 2017, Dubai-based Emirates Airline and low-cost carrier Flydubai began a code-sharing arrangement. Both of those airlines are owned by Investment Corporation Dubai (ICD).

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