Air Arabia Q2 profits rise by 14%

PROFITS UP: Air Arabia soar profits and passenger numbers rise during the second quarter of 2008. (Getty Images)

Air Arabia, the Middle East's biggest budget carrier, aims to expand routes and boost annual profit by over 14.7 percent in 2008, bucking a global downtrend, but soaring fuel costs remain a challenge.

"Our target is to do better than 14.7 percent in 2008," Chief Executive Adel Ali told newswire Reuters after the firm said net profit in the three months to June 30 rose to 82 million dirhams ($22.32 million), compared with 71.7 million a year ago, an increase of 14.4 percent.

"Continued soaring oil prices will remain a pressure on the bottom line, but we hope oil prices will stabilise," he said by telephone.

Airlines across the world have been hard hit by oil prices that have risen more than six-fold since 2002, with some of the biggest carriers posting steep falls in profits or even losses.

But Gulf Arab carriers have mitigated surging oil prices as they benefit from a regional economic boom and increased passenger traffic in the world's top oil-exporting region.

The Sharjah-based airline will add Kiev, Ukraine as a new destination and increase the frequency of its flights to Bombay, Amman and Alexandria as it receives more aircraft, Ali said.

The company will receive one new plane in October and will continue to add aircraft so that by the end of 2009, it will have a fleet of 20 aircraft, Ali said. It currently operates 15 aircraft.

Air Arabia carried 866,272 passengers in the three months to June 30, up 34.1 percent from a year ago, and introduced four new destinations in the first six months of the year.

Turnover in the second quarter climbed to 487 million dirhams compared with 272 million for the same period last year, it said.

Forecasts from four analysts for Air Arabia's second-quarter profit ranged from 77.5 million dirhams to 131.25 million dirhams in a Reuters survey in June.
 
Oil prices averaged $123.80 in the second quarter this year, compared with $65.02 in the corresponding period last year, according to Reuters data.

The company's shares have gained more than 24 percent this year to Sunday's close, outperforming the benchmark index, which is down almost 9 percent. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM