Air Arabia, the UAE's only publicly-listed airline, posted a 24 per cent decline in second-quarter net profit as the number of passengers carried and seats filled remained flat.
Net profit in the three months ending June 30 reached Dh120 million compared with Dh158m a year earlier, it said in a statement on Thursday. EFG Hermes and Sico Bahrain had forecast the Sharjah-based low-cost airline would post a profit of Dh148.4m and Dh85.98m respectively. Quarterly revenues increased four per cent year-on-year to Dh938m.
"Trading conditions continue to be influenced by the regional geopolitical and economic challenges," Sheikh Abdullah Al Thani, chairman of Air Arabia, said.
The International Air Transport Association, which represents about 280 carriers, slashed its forecast of global airlines' profits by 12 per cent to $33.8 billion this year as the industry faces higher fuel costs and geopolitical tensions that would increase its operating risks.
Air Arabia said it recorded "strong profits" despite the "economic pressure that airlines have witnessed in the second quarter of this year, which was driven by lower yield margins, higher fuel prices and seasonality shift in traffic that the market has experienced."
The airline carried more than 2.05 million passengers in the second quarter, little changed from the same period last year. Load factor-a measure of seats filled-reached 78 per cent compared to 79 per cent a year earlier.
In June, Air Arabia said it has a $336m exposure to funds managed by the Abraaj Group, the Dubai-based private equity firm that has filed for provisional liquidation. The airline said there is "no significant impact" on its business or liquidity status and that it has appointed a team of experts to ensure its rights are being protected during the court-supervised restructuring of Abraaj's funds.
Air Arabia operates flights from hubs in the UAE, Morocco, and Egypt to more than 150 destinations with a fleet of 53 Airbus aircraft.
The airline is considering both Boeing 737 and Airbus A320 models for a 100-plane requirement worth about $11bn at list prices, Adel Ali, Air Arabia chief executive, told Bloomberg in July during the Farnborough air show.
It may be worth absorbing the extra costs of running a mixed fleet if Boeing’s jets are more competitive, he said. The carrier needs the new planes both for fleet renewal and for growth.
The airline added 12 new routes to its network in the first half of 2018, it said.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
UFC FIGHT NIGHT: SAUDI ARABIA RESULTS
Main card
Middleweight:
Robert Whittaker defeated Ikram Aliskerov via knockout (Round 1)
Heavyweight:
Alexander Volkov def Sergei Pavlovich via unanimous decision
Middleweight:
Kelvin Gastelum def Daniel Rodriguez via unanimous decision
Middleweight:
Shara Magomedov def Antonio Trocoli via knockout (Round 3)
Light heavyweight:
Volkan Oezdemir def Johnny Walker via knockout (Round 1)
Preliminary Card
Lightweight:
Nasrat Haqparast def Jared Gordon via split decision
Featherweight:
Felipe Lima def Muhammad Naimov via submission (Round 3)
Welterweight:
Rinat Fakhretdinov defeats Nicolas Dalby via split decision
Bantamweight:
Muin Gafurov def Kang Kyung-ho via unanimous decision
Light heavyweight:
Magomed Gadzhiyasulov def Brendson Ribeiro via majority decision
Bantamweight:
Chang Ho Lee def Xiao Long via split decision
COMPANY PROFILE
Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)
FIGHT CARD
Anthony Joshua v Otto Wallin, 12 rounds, heavyweight
Deontay Wilder v Joseph Parker, 12 rounds, heavyweight
Dmitry Bivol v Lyndon Arthur, 12 rounds, light heavyweight
Daniel Dubois v Jarrell Miller, 12 rounds, heavyweight
Filip Hrgovic v Mark de Mori, 12 rounds, heavyweight
Arslanbek Makhmudov v Agit Kabayel, 12 rounds, heavyweight
Frank Sanchez v Junior Fa, 12 rounds, heavyweight
Jai Opetaia v Ellis Zorro, 12 rounds, cruiserweight
The five pillars of Islam
Company profile
Company name:+Dharma
Date started:+2018
Founders:+Charaf El Mansouri, Nisma Benani, Leah Howe
Based:+Abu Dhabi
Sector:+TravelTech
Funding stage:+Pre-series A
Investors:+Convivialite Ventures, BY Partners, Shorooq Partners, L& Ventures, Flat6Labs
The specs
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Fuel consumption: 12.4L/100km
On sale: Now
Price: From Dh157,395 (XLS); Dh199,395 (Limited)
Company profile
Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices
The Specs
Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now
TWISTERS
Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5