Air Arabia’s first quarter profit drops due to coronavirus
The Sharjah-based low-cost carrier made Dh71million in the three months to March 31, a 45% decline from a year earlier
Air Arabia, the UAE’s only listed airline, reported a 45 per cent decline in first quarter profit due to the coronavirus pandemic that brought global air travel to a near-halt.
The Sharjah-based budget carrier made Dh71 million in the three months to March 31, compared to Dh128m a year earlier, it said in a statement on Thursday.
Revenue fell 12 per cent to Dh901m and quarterly passenger traffic declined 14 per cent to 2.4 million. The airline’s seat load factor maintained a relatively high average of 83 per cent.
“Air Arabia witnessed a strong start of the year across the breadth of its operations. However, the impact of Covid-19 pandemic on the global aviation, which materialised in airport closures, travel restrictions and low travel demand, has affected the overall performance of the quarter,” said the company’s chairman Sheikh Abdullah Al Thani.
“Nonetheless, we are glad that Air Arabia still managed to deliver profitability and solid performance during the first quarter of this year,” he added.
The International Air Transport Association, an industry lobby group representing some 290 airlines, forecasts global carriers could lose $314 billion (Dh1.15 trillion) in passenger revenue this year – a 55 per cent drop compared to 2019.
Gulf carriers, along with airlines around the world, have had to take unprecedented measures to survive, including cutting salaries and asking staff to take unpaid leave.
Air Arabia, which has about 2,000 employees in total, cut 57 jobs earlier this month.
“The management team has taken a series of business decisions to control our fixed and running costs during this period while supporting our business continuity,” Sheikh Al Thani said. “All these measures are set in motion at a time when airlines around the world continue to battle the biggest challenge faced in the history of aviation.”
The UAE had suspended all scheduled passenger flights in and out of the country on March 25 for two weeks. UAE airlines, including Emirates, Etihad, flydubai and Air Arabia, are operating a mix of repatriation flights and cargo services, and some have started introducing passenger flights this month.
Air Arabia’s list of destinations available for a mix of cargo and passenger flights include Afghanistan, Bahrain, Egypt, India, Iran, Kuwait, Nepal, Oman and Sudan.
Last month, the carrier announced that Air Arabia Abu Dhabi, a joint venture between Etihad and Air Arabia, has received its Air Operating Certificate (AOC). Adel Ali, group chief executive of Air Arabia, said at the time that the UAE's fifth airline would start operating “as soon as skies and airports open and customers can fly again”.
Updated: May 15, 2020 01:46 PM