Air Arabia eyes Egypt, Morocco for growth

Air Arabia expects Egypt and Morocco to drive growth this year after the low-cost carrier posted its biggest profit on record.

The shares rose as much as 2.3 per cent in Dubai and were headed for their highest close in a year. The airline’s full-year profit attributable to owners of the company rose 29 per cent to Dh631 million ($172 million), helping it raise dividend to 10 fils a share from 7 fils a year ago.

This year the “good spots for us would be Morocco, which is going from strength to strength, and we’re putting more capacity on those lines,” Chief Executive Officer Adel Abdullah Ali told Bloomberg TV in an interview. “Egypt is another one where we’ve grown 100 per cent year-on-year and we may grow more this year, particularly with tourism getting back to the Red Sea.”

Bounced back

Air Arabia, which operates a fleet of 50 Airbus A320 aircraft, has bounced back after overcapacity and lower yields hurt airlines in the Middle East in the past years. Passenger traffic growth in the Middle East slowed to 6.6 per cent in 2017, according to the International Air Transport Association.

Growth of 7 per cent in passenger numbers this year “is easily achievable,” Ali said.

Air Arabia said the average seat load factor, or passengers carried as a percentage of available seats, in 2017 remained at 79 per cent, while it carried more than 8.5 million passengers compared with 8.4 million year ago.