The move will pit the European low-cost carrier against a new carrier planned by local operators Etihad Airways and Air Arabia.
The new airline will be Wizz Air’s first airline established outside of Europe, it said in a statement.
Operations are expected to launch in the second half of 2020, it added.
The airline will focus on establishing routes to markets in which Wizz Air has existing, high growth operations, namely Central and Eastern and Western Europe, as well as the Indian subcontinent, Middle East and Africa, over the long run.
With a fleet comprising Airbus A321neo aircraft, the new airline will gain access to markets with a total of 5 billion customers across Europe and beyond, the statement said.
Wizz will be taking on Air Arabia Abu Dhabi, which Sharjah-based Air Arabia said in October it would launch in conjunction with Etihad.
Sheikh Mohammed Bin Hamad Bin Tahnoon Al Nahyan, chairman of Abu Dhabi Airports, said: “As Abu Dhabi International Airport continues its growth as a major gateway to the UAE and the wider region, we welcome contribution airlines, such as this new airline, and the impact this partnership will make to our continued national economic development. We look forward to building a highly successful partnership with them in the years to come.”
Mohamed Hassan Al Suwaidi, CEO of ADDH, added: “We are proud to partner with Wizz Air, an airline with strong market presence and brand recognition in key European source markets. Through our partnership with Wizz Air, we aim to capitalise on the growing demand for budget travel and support the continued growth of Abu Dhabi as a world-class cultural and tourist destination.”
József Váradi, CEO of Wizz Air Holdings, said: “We are proud that our first airline to be established outside of Europe is in Abu Dhabi... This is a new path of growth for Wizz Air, built on our successful ultra-low cost business model, bringing affordable travel to even more customers."
Bryan Thompson, CEO of Abu Dhabi Airports Company, added: "The launch of the new airline is further testament to the emirate’s robust aviation infrastructure... New travel offerings continue to inspire visitors from around the world to come to Abu Dhabi. We welcome the world to Abu Dhabi, and look forward to providing an exceptional passenger experience to even more travellers through this venture."
The establishment of the new airline is subject to agreement and entry into of definitive documentation with ADDH, the receipt of all necessary internal and external approvals and consents, and the airline satisfying all regulatory requirements of the UAE General Civil Aviation Authority to obtain an air operator’s certificate.