Etihad and Air Arabia to Create New Low Cost Carrier

There will soon be a new low-cost carrier in the skies.

Etihad Airways and Air Arabia have revealed plans to launch a budget airline based out of Abu Dhabi, according to Business Traveler.

In making the announcement, the two airlines said they are aiming to address a "growing demand for budget travel from the United Arab Emirates' capital".

The new airline is to be named 'Air Arabia Abu Dhabi' and will serve regional routes out of Abu Dhabi International, where Etihad is based, Business Traveler reported. It will be the first budget airline based in Abu Dhabi.

More information about the new venture is expected to be made public in the near future.

Air Arabia Abu Dhabi is Etihad's first investment in another airline since its unsuccessful ventures with eight other airlines including Jet Airways, which ultimately went bankrupt and Air Berlin, which also went out of business.

Etihad has embarked on a transformation program, Business Traveler reported, that has involved a variety of actions including aircraft order cancellations and discontinuation of some premium offerings.

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