Air Arabia posts Dh169m loss in H1
Air Arabia, the region's largest low cost carrier, on Monday reported a net loss of Dh169 million for the first-half of 2020, and said the setback was due to the impact of Covid-19 on second-quarter performance amid the cancellation of scheduled flight operations.
The Sharjah-based low-cost operator recorded a first-half turnover of Dh1.021 billion, a drop of 53 per cent compared to Dh2.173 billion in the corresponding period last year.
The carrier served 2.48 million passengers from all its four hubs in the first half, down 57 per cent compared to same 2019 period.
In a statement, Air Arabia said the first-half results were largely driven by the second quarter that witnessed the most severe impact of the epidemic on airline operation. "Regular flight schedule was affected by airport closures and suspension of flights. Operations during the second quarter relied mostly on repatriation, charter, and cargo flights. This resulted in lower revenues for the second quarter reaching Dh120 million and consequently impacting the second-quarter profitability to a net loss of Dh239 million," said the airline.
"Air Arabia took early measures to control overall cost and enhance cash position despite the challenges. These include deferred cost and capital expenditure, workforce restructuring as well as cost rationalisation and efficiency, which all resulted in reducing overall cost and preserving liquidity," it said.
Sheikh Abdullah bin Mohamed Al Thani, Chairman of Air Arabia, said as a result of border closures and flights suspension across all key markets, airlines had to focus on controlling cost while supporting global relief efforts with repatriation and aid flights.
"Air Arabia's robust business model allowed the management team to act fast and take necessary measures to control cost and enhance liquidity while operating a mix of commercial flights where possible. These early measures have resulted in preserving cash and limiting the net loss of the first half to acceptable levels, while still being able to mobilise people during this intricate time and support repatriation efforts," said Sheikh Abdullah.
Air Arabia head said prospects of the global aviation industry remain strong and will continue to play a vital role in the global economic recovery. "While we started to see gradual opening of selective markets around the world, it is now clear that Covid-19 will continue to have a lasting impact on the aviation industry and the path to recovery is expected to be gradual."
Currently, Air Arabia operates a mix of scheduled, repatriation, charter, and cargo flights across its operating hubs in the UAE, Morocco, and Egypt. In July 2020, Air Arabia Abu Dhabi, the capital's first low cost carrier, launched its operations from its base at Abu Dhabi International Airport.
Air Arabia had also upgraded its customer experience journey to include all safety measures that are in line with the highest international safety measures. The carrier's base airports have also upgraded its entire infrastructure to ensure airport journey remain one of the safest while flying.
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