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Air Arabia remains upbeat despite profit drop in Q4

Air Arabia's total net profit for 2023 rose 27 percent year on year to AED1.5bn Wam
Air Arabia's total net profit for 2023 rose 27 percent year on year to AED1.5bn

Air Arabia remains optimistic about the future of low-cost air travel despite reporting a drop in profit in the last quarter of 2023.

Based in Sharjah, the no-frills airline reported a net profit of AED225 million ($61 million) in the fourth quarter of 2023, down 37 percent year on year in the last three months of last year.

The lower profit was due to the softening of yield margins and the ongoing challenges in the industry’s supply chain.

Revenue over the period rose 11 percent year on year to AED1.54 billion.

The airline’s 2023 total net profit rose 27 percent year on year to AED1.5 billion, driven by passenger numbers that surged 31 percent year on year to 16.7 million.

Air Arabia expanded operations across its seven operational hubs and added 26 new routes to its global network. Turnover rose 14 percent to AED6 billion last year.

“The global aviation industry continues to face challenges arising from escalating geopolitical tensions, as well as prolonged supply chain disruptions due to shortages in skilled manpower, aircraft, spare parts availability, and other factors that have led to increased operating costs for the sector,” said chairman Sheikh Abdullah Bin Mohamed Al Thani.

“We have full confidence in Air Arabia’s unique business model, operational excellence, and value-driven product, which continue to attract and serve our growing customer base.”

The airline’s board of directors proposed a dividend distribution of 20 percent for 2023, subject to approval at the upcoming annual general meeting.

The total operating fleet reached 73 Airbus A320 and A321 aircraft across all hubs in the UAE, Morocco, Egypt, Armenia, and Pakistan.

Air Arabia added 26 new routes to its global network last year, taking the total network size to 206 routes.

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