Air Arabia Q3 profit leaps 22%

Gains up at Dh251m; nine-month financial results show load factor jump of 46%

Air Arabia’s turnover climbed 17 per cent to Dh2.8 billion in the nine months ending September 30. — Supplied photo

Dubai: Air Arabia on Tuesday announced its nine-month financial results, declaring a 46 per cent increase on impressive load factor and showing a 22 per cent jump in third-quarter net profit.

The low-cost carrier made a net profit of Dh251 million for the September quarter compared to Dh206 million it earned during the same period last year, beating analyst forecasts. Analysts polled by Reuters on average forecast Dhs182 million for the third quarter.

The Sharjah-based budget airline’s net profit for the first nine months of 2014 stood at Dh498 million compared to Dh341 million reported in the corresponding period of 2013.

For the nine months ending September 30, 2014, the airline posted a turnover of Dh2.8 billion, an increase of 17 per cent compared to Dh2.4 billion in the same period of 2013. The low-cost aviation pioneer served over 5.1 million passengers in the first nine month of 2014, a 13 per cent year-on-year increase. The average seat load factor for the same period stood at 82 per cent.

“Air Arabia’s excellent performance for the year to date demonstrates the strength of its underlying business model and the effectiveness of its growth strategy,” Shaikh Abdullah bin Mohammed Al Thani, Chairman of Air Arabia, said in a statement. “Our focus on expanding both our operational footprint and our route network has created a dynamic platform able to respond to customer demand and seize new commercial opportunities,” Al Thani added.

“Despite ongoing political uncertainty in parts of the region adding to the challenge presented by fluctuating trend in fuel prices; we remain highly confident about the long-term prospects for the industry in the Mena region and our ability to march ahead with our growth plans while delivering our value-for-money promise to our customer’s everyday,” he said.

For the three months ending September 30, 2014, the airline posted a turnover of Dh1.06 billion, an increase of 25 per cent compared to Dh854 million in the same period of 2013.

Air Arabia served over 1.75 million passengers in the third quarter of 2014, a 15 per cent increase compared to 1.52 million passengers in the same period of last year. The average seat load factor — or passengers carried as a percentage of available seats — for the same quarter stood at an impressive 80 per cent.

Air Arabia’s performance for the first nine months of 2014 highlights the robustness of the low cost travel market in the GCC, according to a senior aviation analyst.

“Customers in the GCC are seemingly spoiled for choice when it comes to low-cost travel and with Air Arabia being the first true LCC in the region, it has benefitted from its early market appearance to become synonymous for cheap, affordable travel out of a less congested Sharjah Airport,” Saj Ahmad, chief analyst at London-based StrategicAero Research, told Khaleej Times.

“However, with flydubai just down the road who are expanding even faster than Air Arabia, the onset of direct competition between the two leaves customers with more choice and value-driven options. In a nutshell, there is more than enough market space for both to expand and thrive and Air Arabia’s figures highlight that to great effect,” Ahmad added.

Air Arabia, which completed 11 years of operations last month, has added two new routes to its global network during the third quarter of 2014. From its primary hub in Sharjah, the airline commenced services to Antalya in Turkey, while direct services to Chittagong in Bangladesh began from its recently-opened Ras Al Khaimah hub.

abdulbasit@khaleejtimes.com