Air Arabia posts record profit in 2022 as passenger volumes exceed pre-Covid levels

The UAE-listed airline carried 12.8 million passengers from its seven hubs, nearly double the number in 2021

Visitors board an Air Arabia Airbus A321 Neo. Chris Whiteoak / The National

Budget carrier Air Arabia, the UAE's only publicly-listed airline, posted a record full-year profit in 2022 as the number of passengers it carried exceeded pre-pandemic levels amid strong air travel demand.

Net profit for the year jumped to Dh1.2 billion ($327 million), up 70 per cent from Dh720 million in 2021, the airline said in a statement on Monday.

Revenue for the period rose 65 per cent year-on-year to Dh5.2 billion, as the number of passengers carried nearly doubled. The airline carried 12.8 million passengers, up from 6.8 million in 2021 and exceeding the 12 million flown in 2019, before the Covid-19 pandemic.

The results were “supported by the carrier’s cost control measures, strong yield margins and higher demand for its value-driven product”, Sheikh Abdullah bin Mohammad Al Thani, chairman of Air Arabia, said.

“Although the year 2022 continued be challenging, the aviation industry has begun returning to normality as airlines and airports worldwide witnessed faster recovery following the drop in demand caused by the pandemic”.

Demand for air travel is recovering strongly as people take advantage of the freedom to travel after Covid-19 lockdowns.

However, higher oil prices, rising inflation and supply chain delays have challenged the global aviation industry's recovery as airlines race to step up operations to keep pace with demand.

Air Arabia operates seven hubs in the UAE, Morocco, Egypt, Armenia and Pakistan. In 2022, it added 24 new routes and took delivery of 10 new aircraft, ending the year with a fleet of 68 Airbus A320 and A321 narrow-bodies that operate to more than 190 routes in the Middle East, Africa, Asia and Europe.

The airline's average seat load factor — a measure of how well an airline fills available seats — stood at 80 per cent for 2022, compared with 73 per cent in 2021.

Air Arabia’s board of directors proposed a dividend distribution of 15 per cent of share capital, the equivalent of 15 fils per share. This is subject to ratification by Air Arabia’s shareholders, the airline said.

Air Arabia's fourth-quarter profit dropped by nearly a quarter to Dh356 million, from Dh467 million in the same period of 2021. The decline was due to “record-high” yield margins and lower fuel prices in the fourth quarter of 2021, the airline said.

However, revenue for the quarter rose 7 per cent year-on-year to Dh1.4 billion, as it carried more than 3.6 million passengers from its seven hubs, a 44 per cent increase on the year-earlier period. The load factor stood at 79 per cent, reflecting the recovery in travel demand.

“While airlines continue navigating various challenges this year, we are confident of the fundamentals of the aviation sector and the underlying demand for affordable air travel,” Mr Al Thani said.