Air Arabia second quarter earnings increase 21 per cent

Net profit rises to Dh158 million after it added 12 new routes from its five operating hubs in first half

Shares in Air Arabia surged on positive second quarter results. Maja Hitji / EPA
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Air Arabia, the Sharjah-based low-cost carrier, said second-quarter net profit rose 21 per cent amid cost cutting and greater operational efficiency.

Net profit rose to Dh158 million in the three months ended June compared with Dh131m in the same period last year. Revenues increased to Dh906m in the second quarter compared with Dh894m in the same period last year. Air Arabia ferried more than 2.05 million passengers in the second quarter. Average seat load, or passengers carried as a percentage of available seats,  stood at 79 per cent in the second quarter.

“Air Arabia’s strong second-quarter financial performance is a testament to the carrier’s operational efficiency and robust growth strategy," said Sheikh Abdullah Bin Mohammad Al Thani, the chairman of Air Arabia.

"Despite the continuous pressure on yield margins, which is driven by the market and the economic environment, Air Arabia managed to register a solid second quarter net profit backed by the carrier’s cost control measures, operational efficiency and combined with its momentum growth”.

Air Arabia said it received two new Airbus A320 aircraft in the first half of 2017 ending June 30 and added 12 new routes from its five operating hubs in the UAE, Morocco, Egypt and Jordan. The latest route added, in July, was to Trabzon in Turkey.

Air Arabia started its operations in October 2003 and currently has a total fleet of 48 new Airbus A320 aircraft, serving some 130 routes.

The positive results come amid challenging times. Globally, competition in the airline business is heating up just as a slowdown in economic growth regionally is also weighing on the profitability of regional carriers.

Profit at Emirates airline in the financial year ending March 31 fell by 82.5 per cent year-on-year to Dh1.25 billion as the airline industry suffered from rising capacity, lower demand, in part because of terrorism fears, and a slowdown in oil-based economies.

The low-cost carrier flydubai also reported a 69 per cent decline in earnings in 2016 because of the challenging operating environment.