Kuala Lumpur, July 2 - AirAsia, the Malaysian budget airline, is actively exploring the establishment of a new Gulf hub to enhance connectivity between South-East Asia and Europe, with Ras Al Khaimah in the United Arab Emirates and a yet-to-be-named location in Saudi Arabia among the top contenders. This strategic move, announced by AirAsia’s founder and CEO Tony Fernandes in a recent interview with Dubai Eye radio, aims to capitalize on the Gulf’s pivotal geographic position as a transit point for long-haul flights. The airline has shortlisted four airports in the region for this ambitious venture, signaling a significant step in its post-pandemic recovery and global expansion strategy. The Gulf hub is expected to be operational by the end of 2025, marking AirAsia’s second attempt to establish a regional presence after an earlier withdrawal from Abu Dhabi in 2010 due to operational challenges.
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The decision to consider Ras Al Khaimah and Saudi Arabia reflects a calculated approach to avoid oversaturated aviation markets like Dubai and Sharjah. Fernandes explicitly ruled out Dubai, citing its already robust infrastructure and dominance by major carriers like Emirates, which diminishes the potential impact of AirAsia’s low-cost model. Similarly, Sharjah was dismissed due to the strong presence of Air Arabia, a well-established regional competitor. Ras Al Khaimah, however, presents a compelling case with its rapidly developing tourism and aviation sectors. The emirate’s international airport is undergoing a significant 30,000-square-meter terminal expansion, incorporating eco-friendly technologies such as energy-efficient lighting and water recycling systems. This aligns with Ras Al Khaimah’s broader vision to attract three million tourists annually by 2030, supported by a 28% growth in arrivals in 2024 and new direct flight connections to cities like Bucharest, Prague, and Jeddah. The emirate’s investor-friendly policies and projected addition of over 7,400 hotel rooms by the end of the decade further enhance its appeal as a hub for AirAsia’s operations.
Saudi Arabia, meanwhile, aligns with AirAsia’s expansion plans due to its burgeoning aviation market and ambitious tourism goals under Vision 2030. AirAsia’s parent company, Capital A, announced in May 2025 plans to expand into Saudi Arabia with new routes to Riyadh, Dammam, and increased frequencies to Jeddah from Kuala Lumpur. Fernandes has held discussions with Gulf state officials, including at the Paris Air Show, to explore partnerships and investment opportunities, though he emphasized that sovereign investment from the UAE or Saudi Arabia is not a prerequisite for the hub’s establishment. The airline aims to leverage the Gulf hub to serve secondary European cities such as Dublin, Cologne, Manchester, and Glasgow, tapping into underserved markets and boosting connectivity.
This move comes as AirAsia emerges from a challenging period marked by the pandemic, during which it was classified as a distressed company by the Malaysian government. The airline is also navigating a restructuring phase while pursuing fleet expansion, with Fernandes confirming talks to acquire 50 to 70 Airbus A321XLR jetliners. Despite regional tensions, including recent airspace disruptions in the Gulf, Fernandes remains optimistic about the hub’s potential to drive traffic both ways, reinforcing AirAsia’s position as a key player in the global low-cost carrier market.