Budget carrier Air Arabia, the UAE’s only publicly listed airline, on Thursday said it swung to a surprise fourth-quarter net loss, citing overcapacity in the regional aviation market and slow growth in major economies.
The Sharjah-based carrier made a net loss of Dh38.6 million in the three months to December 31, according to Reuters calculations based on its financial statements. This compares with a profit of Dh55.9m in the corresponding period of 2015.
EFG Hermes and Sico Bahrain had forecast the airline would make a fourth-quarter profit of Dh131.8m and Dh127.9m respectively.
Air Arabia’s 2016 net profit attributable to owners of the company was Dh490.4m, down from Dh511.3m a year ago, it said in a bourse statement.
The company also said its board recommended a dividend of 7 per cent for 2016, down from 9 per cent for 2015.
“The fourth quarter of 2016 was impacted by deteriorating yield margins that the industry in general and the Middle East region in particular is witnessing,” chairman Sheikh Abdullah bin Mohammed Al Thani said.
“The solid operating metrics and high seat load factor that Air Arabia achieved in the fourth quarter were impacted by a continuous drop in yield margins as a result of the overcapacity deployed in the market and the slow growth environment in major economic hubs.”
Air Arabia said it flew 2.1 million passengers in the fourth quarter, up 6 per cent from a year earlier.
* Reuters
business@thenational.ae
Follow The National's Business section on Twitter
