Abu Dhabi’s Etihad Airways is set to announce the launch of a $1 billion initial public offering (IPO) this week. This IPO would mark the first offering of a major Gulf airline in nearly two decades.

The airline intends to sell 20% of its business by issuing new shares, which will be used to support its growth plans. The sources chose to remain anonymous as the information had not yet been made public.

Etihad Airways is owned by Abu Dhabi’s $225 billion wealth fund, ADQ, which did not provide any comments regarding the IPO announcement. The offering will consist of 2.7 billion primary shares, with the proceeds going directly back to the company rather than to the main shareholder.

The upcoming Gulf listing is anticipated to attract investor interest amid challenges in the airline industry, particularly in Europe, where airlines have faced delivery delays, engine issues, labor disruptions, and rising costs. Last week, Etihad Airways reported a significant net profit that more than tripled to $476 million last year.

Since its inception in 2003, the airline has undergone a multi-year restructuring and management changes but has experienced growth under the leadership of new CEO Antonoaldo Neves. As part of its future strategy, Etihad plans to expand its network to over 125 airports by 2030, aligning with Abu Dhabi’s efforts to become a global travel hub and diversify its economy.

This effort includes the recent launch of a multibillion-dollar new terminal at Abu Dhabi’s Zayed International Airport, which tripled the hub’s annual capacity to 45 million passengers. If successful, Etihad’s IPO would be the second in the UAE this year, following technology services firm Alpha Data’s announcement of a 40% stake offering to investors earlier this month.