Abu Dhabi’s Etihad Airways plans to launch a new low-fare airline in partnership with Air Arabia called Air Arabia Abu Dhabi, the emirate’s airport authority said without mentioning a start date in a statement released Wednesday. The new carrier plans to base its operation at Abu Dhabi International Airport, offering connections to several now unserved destinations.

Etihad Aviation Group CEO Tony Douglas said the airline would operate based on “an independent strategy” steered by a board of directors consisting of members nominated by Etihad and Air Arabia.

“We are delighted to be working in partnership with Etihad Aviation Group and Air Arabia to launch Abu Dhabi’s first low-cost carrier," added Abu Dhabi Airports CEO Bryan Thompson. “The establishment Air Arabia Abu Dhabi, with its hub at Abu Dhabi International Airport, is a milestone in the continuing growth of Abu Dhabi’s aviation industry and the Emirate’s status as a global hub for business and leisure travelers.”

The move by Etihad follows a series of divestments in loss-making airlines, leaving Air Serbia, Air Seychelles, and Virgin Australia as its last remaining equity partners. Following the departure of long-time CEO James Hogan, Etihad early this year completed fleet renegotiations with Airbus and Boeing following a so-called strategic review that resulted in a decision to slow and/or cut widebody deliveries. The new agreements will see Etihad take delivery “over the coming years” of just five Airbus A350-1000s and six Boeing 777-9s, far fewer than reflected in the firm orders it placed at the 2013 Dubai Air Show. It said it expects to take all 26 Airbus A321neos on order.  

In 2013 Etihad placed orders for 40 A350-900s along with 10 A350-1000s. At the time the airline said it planned to take the first -900 in 2020. That same year Etihad ordered 17 Boeing 777-9s and eight 777-8s.

The airline said the restructuring would allow it to concentrate on the phased introduction of new aircraft types and enable “efficient rationalization” of its fleet, as it shifts its focus to its Abu Dhabi hub from a more aggressive, global growth strategy.