Operating out of Abu Dhabi International Airport, a new airline dubbed “Air Arabia Abu Dhabi” is being set up through a joint venture between fellow Abu Dhabi-based carriers Etihad Airways (Etihad) and Air Arabia.

“This exciting partnership supports our transformation programme and will offer our guests a new option for low-cost travel to and from Abu Dhabi, supplementing our own services,” Tony Douglas, group chief executive of Etihad Aviation Group, said. “We look forward to the launch of the new airline in due course.”

Where Etihad is concerned, the new airline should bolster its 2017 turnaround plans to become profitable again by 2023, having already reduced overhead costs, dropped unprofitable routes, cut jobs and restructured Airbus and Boeing plane orders. This move comes after Etihad somewhat unsuccessfully took minority stakes in a number of global carriers and will now see it concentrate on point-to-point rather than transcontinental traffic.

While the joint venture has been announced, no additional details have been made available as to the size of stake each carrier will have in the joint venture, or the size of its fleet of aircraft. Analysts see this as a positive move that could see a low-cost carrier appeal to the demand from low-income workers who wish to travel to India, Pakistan and the Philippines, while it could also help to feed traffic to onward destinations served by Etihad’s current long-haul flights.