Air Arabia profits slip even as revenues climb

Wam

Air Arabia’s profits declined in the second quarter of 2024, impacted by rising costs amid economic and geopolitical uncertainties.

The UAE’s low-cost carrier reported a 7 percent fall in net profit, down to AED427 million ($116.3 million) from AED459 million in the same period last year.

“The aviation industry continued to experience slower yield growth and rising costs during the second quarter of this year, driven by economic and geopolitical uncertainties, currency fluctuations, fuel price volatility, and supply chain disruptions, which increased inflationary pressures,” said chairman Abdullah Al Thani.

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Despite the decline in profit, turnover increased 19 percent to AED1.65 billion in the second quarter of 2024, up from AED1.39 billion a year earlier. The number of passengers carried also rose 19 percent, reaching 4.5 million compared to 3.8 million in the previous year.

The average seat load factor, representing the percentage of occupied seats, grew 3 percent annually to 79 percent in the second quarter.

For the first half of 2024, Air Arabia’s turnover climbed 13 percent year on year to AED3.19 billion, as passenger volume increased 16 percent to 8.9 million. However, net earnings for the six-month period dropped 13 percent to AED693 million.

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The airline added three new aircraft to its fleet in the first half, bringing its total to 77 owned and leased Airbus A320 and A321 aircraft.

Air Arabia also expanded its network, launching 16 new routes across its operating hubs in the UAE, Morocco, Egypt and Pakistan.

Liquidity stood at AED4.8 billion in cash and cash equivalents for the first half of 2024.