Asia’s largest budget carrier AirAsia is looking to establish a Middle East hub in Bahrain to shore up its international scope, Bloomberg reports, citing sources it says are in the know. The carrier’s CEO Tony Fernandes is reportedly set to go public with the move in an investor forum in Bahrain, the sources said.

Setting up a base in Bahrain could help the country tap into the booming budget flyingmarket in the region. While low-cost carriers’ (LCCs) share of the regional aviation market has doubled over the past decade, largely driven by growth and market maturation in KSA, the UAE, and Egypt, Bahrain has lagged in LCC market growth, and AirAsia’s possible hub could help it seize on unrealized growth potential, according to an OAG Aviation report (pdf). The LCC market grew at an annual growth rate of 11.5% during that period.

REMEMBER- AirAsia plans to soar far and high: The Malaysian-based airline is angling to use long-range aircraft to launch flights to North America and Europe with budget prices, Fernandes reportedly said earlier this year. The carrier signed an MoU with Airbus to purchase 50 long-range A321XLR planes with conversion rights for another 20 of the single-aisle jets earlier this year. It was reportedly eyeing locations in the Gulf to set up hub airports, including in Saudi Arabia, Bahrain, and the UAE’s Ras Al Khaimah.

But expect some competition: Bahrain could serve as a key transit hub for the LCC carrier, connecting Asia to Europe and North America. On that basis, Flydubai and Air Arabia — whose business model is primarily backed by its Asia connection — would likely be AirAsia’s main competitors. Some 70% of flydubai’s capacity is Asia-bound, whereas UAE’s Air Arabia’s Asia destinations take up 81% of its capacity, according to OAG Aviation’s report.

REFRESHER- PIF is all in on AirAsia: Saudi’s PIF invested USD 100 mn in AirAsia in March, becoming the biggest contributor to the carrier’s USD 226 mn fundraising target. A key draw behind PIF’s interest at the time was AirAsia’s backlog of over 350 Airbus narrowbody aircraft. PIF’s Riyadh Air secured a number of these delivery slots, alleviating AirAsia’s financing strain while securing planes needed for Riyadh Air’s 3Q 2025 launch.

Bahrain’s aviation ambitions: The Gulf state is said to be competing with other regional players — namely, the UAE and Qatar — in the aviation sector, with its flag carrier Gulf Air inking a USD 4.6 bn agreement with Boeing last July to purchase up to 18 787 Dreamliners. The move is expected to expand Gulf Air’s international network and increase passenger capacity by 20%.

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