Air Arabia's net profit rises as passenger volumes grow

Low-cost airline earned Dh128m in net profit in three months to March 31

DUBAI, UNITED ARAB EMIRATES. 28 OCTOBER 2018. Air Arabia’s 15th Anniversary Celebration at the Air Arabia hanger in the Sharjah Cargo Terminal. Launch of the newly outfitted Airbus. (Photo: Antonie Robertson/The National) Journalist: Sarah Townsend. Section: Business.

Air Arabia, the UAE's only listed carrier, reported a 16 per cent increase in first-quarter net profit year-on-year as it carried more passengers and added more routes.

Net profit in the three months ending March 31 reached Dh128 million, Air Arabia said on Sunday. First-quarter revenues increased 17 per cent to Dh1.02 billion year-on-year.

"We have continued with our network expansion strategy in the first quarter of this year adding new routes and new frequencies across all operating hubs while driving cost margins lower," said Sheikh Abdullah Bin Mohamed Al Thani, Air Arabia's chairman.

The airline is in talks with Airbus and Boeing for an order of at least 100 planes that it expects to place within three to four months as it seeks to replace and expand its fleet of 54 Airbus A320-family aircraft, its chief executive Adel Ali said last week.

Air Arabia carried more than 2.8 million passengers in the first quarter, up 8 per cent from the same period a year ago. It's seat load factor - a measure of  capacity utilisation - reached 84 per cent, up 3 per cent year-on-year.

Oil prices, geopolitics and economic developments will continue to impact trading conditions in the region but the airline is "confident" in the aviation industry's long-term fundamentals and increased demand for budget travel, Mr Al Thani said.

Air Arabia added five new routes in the first quarter, with flights from Casablanca to Lisbon and Tunis; from Sharm Al Sheikh to Amman and Luxor; and from Sohag in Egypt to Riyadh.  The carrier received its first long-range narrowbody Airbus A321 neo LR jet in April and will begin direct flights from Sharjah to Kuala Lumpur in July.

Air Arabia has more than 155 international and domestic routes from its hubs in the UAE, Morocco and Egypt.

"As we continue with our expansion plan in 2019, we remain committed to investing in innovative products that provide unmatchable value while traveling by air," Mr Al Thani said.