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Air Arabia’s profit slips in Q3

SHARJAH — Air Arabia, the first and largest low-cost carrier in the Middle East and North Africa, suffered a 5.6 per cent decline in its third quarter net profit.

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The budget airline on Wednesday declared a net profit of Dh136 million for the third quarter, compared to Dh144 million it reported during the same period last year. Air Arabia posted a turnover of Dh568 million during the period, an increase of four per cent compared to Dh548 million in the same period of 2009.

“Air Arabia is pleased to announce such positive financial performance despite continued challenging market conditions,” Air Arabia Chairman Shaikh Abdullah bin Mohammed Al Thani said in a statement.

“Air Arabia continues to post sustained quarterly profits with a high seat load factor and rising passenger traffic, demonstrating the strength of Air Arabia’s business model and long-term expansion strategy,” Al Thani added.

The airline served 1,147,066 passengers in the third quarter of 2010, an increase of 14 per cent compared to 1,007,680 passengers in the same period last year. In the three months ending September 30, 2010, Air Arabia’s average seat load factor — or passengers carried as a percentage of available seats — stood at an impressive 84 per cent, an increase of 8.5 per cent compared to same period of 2009.

Although Air Arabia declared a decline in its net profit for the third quarter, the results beat analysts’ expectations. Seven analysts forecast average profit of Dh90.99 million in a Reuters survey last month.

Established in 2003, the Sharjah-based carrier announced the launch of Jordan’s first low-cost carrier as part of it expansion plans in June. This week, Air Arabia chief executive Adel Ali said he expected to launch the carrier’s fourth hub in Jordan next year.

abdulbasit@khaleejtimes.com