Air Arabia profit climbs 30% to Dh566m in 2014

Airline carried over 6.8m passengers, 12% more than last year

Dubai — Low-cost carrier Air Arabia reported on Sunday a record 30 per cent net profit surge to  Dh566 million for 2014 regardless of a 28 per cent plunge in fourth quarter profit that the airline blamed on  fuel hedging.

The Sharjah-based airline’s net profit for the fourth quarter stood at Dh68 million compared to Dh94 million for the same period last year.  The airline’s turnover for the full 2014 rose 17 per cent to Dh 3.7 billion,  driven by increased passenger numbers, the fast growing budget carrier said in a statement.

“Air Arabia carried over 6.8 million passengers in 2014, 12 per cent more than last year. The average seat load factor – or passengers carried as a percentage of available seats – for the same period stood at an impressive 81 per cent,” it said.

The Board of Directors of Air Arabia has proposed a dividend distribution of nine per cent of capital, which is equivalent to nine fils per share. This proposal is subject to ratification by the shareholders of Air Arabia at the company’s upcoming Annual General Meeting.

Shaikh Abdullah bin Mohammad Al Thani, Chairman of Air Arabia, said the carrier’s programme of expansion into new markets combined with improved operational efficiencies has led to another year of sustained growth and profitability for the airline.

“The strong performance over the year is also testament to our focus on delivering outstanding quality and value to our customers. The year 2015 continue to witness political uncertainty in some parts of the region and with the current fluctuating fuel prices, the pressure on the global economies is increasing. Despite the regional and global economical and geo-political challenges, we remain highly confident about the long-term prospects for our business,” said Shaikh Abdullah. The airline said it would continue its strategy to expand into new markets and increase its network coverage, “making air travel accessible to millions of customers across the Mena region and beyond.” Air Arabia said the drop in the fourth quarter 2014 was mainly due to a temporary downward correction in the fuel hedge portfolio, which will regain its benefits going forward. The airline’s turnover for the last quarter of 2014 was Dh924 million, an increase of 14 per cent compared to Dh811 million reported for the same period in 2013. Passenger traffic for the fourth quarter 2014 reached 1.7 million, an increase of eight compared to the same quarter of last year. 

Now in its eleventh year of operations, Air Arabia operates flights to 101 destinations. The newly voted Low Cost Carrier of the Year, by Aviation Business, Air Arabia has seen its flight network expand substantially with the addition on prominent new routes, such as Cairo in Egypt and Antalya in Turkey, from its main base at Sharjah International Airport. The carrier now operates from five international hubs, including the UAE (Sharjah & Ras Al Khaimah), Morocco, Egypt and Amman, Jordan. In the first half of 2014, Air Arabia opened its fourth international hub in Ras Al Khaimah.

— issacjohn@khaleejtimes.com