Air Arabia posts Dh509 million profit
Over 8.4 million passengers served in 2016, a 12% year-on-year increase
Air Arabia on Thursday announced that its net profit for the full year ending December 31, 2016 was Dh509 million, four per cent lower than the 2015 figure of Dh531 million.
The airline flew more than 8.4 million passengers in 2016, a 12 per cent year-on-year increase; while average seat load factor - passengers carried as a percentage of available seats - in 2016 stood at 79 per cent. The low-cost carrier's turnover for the full year 2016 was in line with the preceding 12 months reaching Dh3.8 billion.
Air Arabia's board of directors proposed a dividend distribution of seven per cent of share capital, which is equivalent to 7 fils per share. This proposal was made following a meeting of the board of directors of Air Arabia and is subject to ratification by Air Arabia's shareholders at the company's upcoming annual general meeting.
Sheikh Abdullah bin Mohammad Al Thani, Chairman of Air Arabia, noted that 2016 was a challenging year for the global aviation market, as economic and political uncertainty continued to impact the industry.
"We have seen vigilant fiscal markets, weakening currencies and political instability impacting airlines performance. Despite all challenges, Air Arabia recorded solid full year results driven by growth, efficient operations and tight cost controls," he said.
"The fourth quarter of 2016 was impacted by deteriorating yield margins that the industry in general and the Middle East region in particular is witnessing. The solid operating metrics and high seat load factor that Air Arabia achieved in the fourth quarter were impacted by continuous drop in yield margins as a result of the overcapacity deployed in the market and the slow growth environment in major economic hubs."
In the fourth quarter of 2016, Air Arabia reported a net loss of Dh33 million despite maintaining a strong average seat load factor of 80 per cent. Turnover for the three months ending December 31, 2016 was Dh814 million, a drop of 15 per cent compared to Dh956 million in the same period in 2015.
Air Arabia flew 2.1 million passengers in the final quarter of 2016, an increase of six per cent on the corresponding 2015 figure. Air Arabia also added nine new routes to its global network in 2016 from its five operating hubs in the UAE, Morocco, Egypt, and Jordan. The carrier took delivery of seven new aircraft and ended the year with a fleet of 46 Airbus A320 aircraft operating to 124 routes across the Middle East, Africa, Asia and Europe.
"As the market conditions continue to be challenging, Air Arabia will continue to drive its business by a clear strategy for organic growth and supported by strong measures to continue driving operating expenses lower. Above all, we will remain focused on delivering innovative value driven services to our customers allowing them to travel more often to more places," Al Thani said.
Air Arabia was ranked third among top 50 airlines in the world in 2016 by Airfinance Journal.
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