Air Arabia posts lower income on flat passenger numbers

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 occuppied seats remained flat.

Net profit in the three months ending June reached Dh120 million compared with Dh158m a year earlier, it said on Thursday. EFG Hermes and Sico Bahrain had forecast the low-cost airline would post a profit of Dh148.4m and Dh85.98m, respectively. Quarterly revenues increased 4 per cent year-on-year to Dh938m.

“Trading conditions continue to be influenced by the regional geopolitical and economic challenges,” said Sheikh Abdullah Al Thani, chairman of Air Arabia.

The International Air Transport Association, which represents about 280 airlines, slashed its forecast of global airlines’ profits by 12 per cent to $33.8 billion (Dh124.2bn) 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.”

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 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 restructure of Abraaj.