AirAsia has signed a provisional accord with Bahrain to set up a Middle East hub in the Gulf country, expanding on its plans to create a global low-cost airline.
Tony Fernandes, the Malaysian carrier group’s founder, made the announcement at an investor forum in Bahrain, confirming an earlier Bloomberg News report. The Malaysian entrepreneur’s Capital A Bhd signed a letter of intent with Bahrain’s transport ministry.
“Bahrain will be a powerful launchpad for us in the Middle East,” Fernandes said in a statement.
Bahrain said the deal reinforced the nation’s role as a strategic connector between Europe, the Middle East and Asia. The Malaysian budget carrier aims to operate more than 25 daily flights via Bahrain by 2030. The newly established hub will explore obtaining a local airline operating license to operate flights from Bahrain elsewhere in the Middle East, Central Asia, Africa and Europe.
The move expands on a effort to strengthen the Malaysian carrier’s ties to the Middle East. Saudi Arabia’s sovereign wealth fund played the single biggest role in an AirAsia fund raising earlier this year, investing about US$100 million, as the airline sought funds to reboot its growth ambitions after years of Covid-induced losses.
AirAsia Group needs a Gulf hub to connect flights and passengers between Asia and Europe using its Airbus SE aircraft. The longer-term plan is to have a fleet of 600 planes in 10 years, significantly more than the 255 in service now that are shared among its operating airlines across Southeast Asia. The company plans to expand destinations from 143 to 175 in the same period.
Bahrain is working to grow its position as an aviation and logistics hub to better compete with its neighbors, the UAE and Qatar. The country’s national carrier has been on a mission to become profitable and expand its fleet, placing an order with Boeing Co. for as many as 18 widebody jets during a meeting in Washington between Bahrain Crown Prince Salman bin Hamad Al Khalifa and US President Donald Trump in July.
