traffic rights

Traffic Rights Dispute Grounds Air Arabia Ambitions

The CEO of low-cost carrier Air Arabia says a traffic rights dispute has grounded the ambitions of its Jordanian subsidiary.

By Nada Atieh

When it first began flying from its hub at Queen Alia International Airport in 2015, Air Arabia Jordan promised to shake-up the Kingdom’s aviation sector by offering low-cost flights to destinations across the region. It even aimed to launch routes to Europe, which would have been a true game-changer on routes long-dominated by Royal Jordanian, which is still partly state owned.

But in November, the airline abruptly suspended its scheduled services and started operating as a chartered carrier. Adel Abdullah Ali, the CEO of the airline’s Sharjah-based mother company, said the decision was taken after Jordanian authorities failed to grant permission to fly to new destinations.

Why was your request to launch new routes turned down?

I can’t say we haven’t had access to traffic rights. But what I can say is that traffic rights are not owned by any airline—they belong to the country. We can only request them from the authorities and we have not been granted what we have been asking for all this time, even with places which Jordan has an open-sky arrangement with, like between Jordan and Saudi Arabia. We have no power and have to respect the countries we do business with. So we have changed and adapted the business model purely for a commercial purpose. The national carrier has had some influence. They [Jordan] need to decide, a country [with competition] or a national airline. We are a guest in Jordan and only minority investors, so we will leave it to the Jordanians to decide what they would like and we would be very happy to take whatever position they wish us to take.

Our conversation with the authorities, in terms of civil aviation, was that when you are able to provide us with more routes that make commercial sense and are able to operate in line with the Jordanian regulation on foreign investments and joint ventures in the Kingdom, we’ll be more than happy to resume our normal operations.

What does this mean for the airline’s future?

This means we will have very slow growth until such time that we would be given the opportunity to expand. We still have our main staff employed and we are still flying but we’re simply doing it in a different way.

Do you regret moving into the Jordanian aviation sector?

I always go into business knowing that every venture comes with risk. I would say that perhaps I wish there was more transparency in foreign investment policies in Jordan. The rules say something, and we like and agree with the policies in place, but the treatment and application of those policies is something different. The rules are great, it’s the application that’s the challenge.