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Air Arabia launching IPO in 1st quarter

Air Arabia has applied to the UAE Ministry of Economy and relevant regulatory authorities for approval to launch an Initial Public Offering (IPO) in the first quarter of this year.

The Sharjah-based airline, which began operations in October 2003, will become the first airline in the Gulf region to go public.

Air Arabia chairman Sheikh Abdullah bin Mohammad Al Thani said: “We are extremely pleased to announce that Air Arabia has submitted its application to the UAE Ministry of Economy to convert the carrier into a public shareholding company ahead of a planned IPO.

“Upon approval, the airline will launch its IPO.”

He said: “In just over three years since launch, Air Arabia has established itself as one of the region’s great success stories.

“Born in Sharjah and serving a region that stretches across the Middle East, North Africa, Indian subcontinent and Central Asia, Air Arabia has set its sights on reaching even greater heights.”

SHUAA Capital has been appointed the Financial Advisor, Lead Manager and Bookrunner for the IPO.

Having served more than 3.4 million customers since it began operations and currently serving 32 destinations, the company has been profitable since its second year of operations.

Air Arabia chief executive officer Adel Ali said: “The decision to go public was prompted by our desire to increase our equity capital to support our ambitious plans for future growth.

“As well, we are keen for our customers, staff and stakeholders to share in the success of Air Arabia through this IPO.”

He added: “Based on both the individual success of Air Arabia and the growing demand for commercial and leisure travel in the region, we are planning to expand the company’s current operating fleet over the next five years from nine Airbus A320s to a total of 34 aircraft.”

Makram Kubeisy, managing director of SHUAA Capital’s Investment Banking Advisory, said: “We are pleased to be associated with Air Arabia’s IPO, which is a landmark for both the sector and the region.

“We believe that local and regional equity markets are an attractive source for growth capital for companies with a successful track record, such as Air Arabia.

“Indeed, the carrier is financially sound and has a strong management team that has significantly grown the business and profitability in a remarkably short span of time.”

Air Arabia was established in February 2003 by an Amiri decree issued by Dr Sheikh Sultan bin Mohamed Al Qassimi, Ruler of Sharjah and Member of the Supreme Council of the UAE.

The company began operations in October of the same year.

Based in Sharjah and with a fleet of nine Airbus A320 aircraft, Air Arabia serves 32 destinations across the Middle East, North Africa, Indian Subcontinent and Central Asia, including Afghanistan, Bahrain, Egypt, India, Iran, Jordan, Kazakhstan, Kuwait, Lebanon, Oman, Nepal, Oman, Qatar, Saudi Arabia, Sri Lanka, Syria, Sudan, Turkey and Yemen.

Air Arabia is modeled after leading American and European low-cost airlines and is customised to local preferences.

Its main focus is to make air travel more convenient through Internet booking and offering the lowest fares in the market without sacrificing on service or safety standards. (TradeArabia News Service)


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