Air Arabia reports strong first quarter net profit of AED114 million, up 34%
Air Arabia has reported strong financial results for the first quarter of 2016 exceeding analyst expectations as the Middle East's first and largest low cost carrier continued to deliver outstanding performance and attract new customers.
Air Arabia reported a net profit of AED114 million for the three months ending March 31, 2016, 34 percent higher than the corresponding 2015 figure of AED85 million. In the same period, the airline posted a turnover of AED946 million, an increase of 7 percent on AED886 million in the first quarter of last year.
The airline flew more than 2.1 million passengers between January and March 2016, up 17 percent on the corresponding period of last year. The airline’s average seat load factor – or passengers carried as a percentage of available seats – during the first three months of 2016 stood at an impressive 81 per cent.
Sheikh Abdullah Bin Mohamed Al Thani, chairman of Air Arabia, said: “Air Arabia has made an excellent start to 2016, maintaining the momentum we established last year and attracting new customers to our brand. Our operational efficiency allied to the success of our route expansion strategy and the popularity of our value-add service proposition, leaves Air Arabia well placed to navigate the current macroeconomic challenges and benefit from the many opportunities in the region’s aviation sector.”
Analyst Saj Ahmad commented: “A rise in profits to AED114m over the same period a year ago highlights the robustness and vibrancy of the low cost travel market that has centred in the UAE for the wider GCC - as one of the first low cost airlines, Air Arabia has managed to leverage the strength of its Sharjah hub to lure in most cost-savvy fliers which in turn has fed load factors to over 81% across its fleet and network.
“Air Arabia's continued expansion into central Europe has allowed the airline to tap into new growth markets and connect new city pairs that previously didn't exist and also helps mitigate against fluctuations in regional demand, which in some markets has been strained or challenging given the active theatres in Syria, Lebanon, Yemen and disruptive development in other areas like Egypt, Jordan and Saudi Arabia.”
Ahmad added: “It's a brilliant start to the year for Air Arabia, notwithstanding the benefit of a lower fuel price environment - however airline will soon have make choice between the 737MAX and A320neo if it wants to maintain its growth trajectory and not fall behind flydubai, which already has orders in place for up to 100 737 MAX 8s.”