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Sun 11 May 2008 04:31 PM

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Air Arabia profit soars 81%

Region's biggest low-cost carrier sees Q1 earnings rise on passenger traffic, more destinations.

Air Arabia, the Middle East's biggest low-cost carrier, said first-quarter profit rose 81% after it carried more passengers and added more destinations.

Net income in the three months to March 31 surged to 78 million dirhams ($21.24 million) compared with 43 million dirhams in the year-earlier period, the Sharjah-based firm said in a statement.

The company's turnover rose 59% to 383 million dirhams and the number of passengers rose to 757,000 compared with 577,000 in the year-ago period, it said.

"High oil prices are doubled-edged swords, in one way the economy is good because of high oil prices so more people travel and therefore what is helping is the fuel surcharge," Chief Executive Adel Ali told newswire Reuters, saying the high sector factor was the real driving force behind quarterly results.

"The first quarter is normally tough, but we have a reasonably good seat factor because of the strength of the economy."

The company also added two new destinations in India, raising its total number of destinations to 39 locations, and opened its new hub in Kathmandu, Nepal.

Cairo-based investment bank EFG-Hermes and Deutsche Bank forecast the company would post profit of 70 million dirhams and 92 million dirhams respectively in the first quarter, according to a Reuters survey of analysts in March.

The firm's shares have rallied more than 90% since it listed on the Dubai Financial Market (DFM) last July. The stock closed 0.49% lower on Sunday, before the results were released. (Reuters)