Sharjah-based low cost carrier highlights the strong impact of high oil price and currency devaluation on performance
UAE-based Air Arabia on Tuesday announced a 17 percent drop in net profit for the first nine months of 2018, despite a rise in turnover to AED3 billion ($810 million).
Air Arabia said its "robust" financial performance was recorded despite the strong impact of high oil price and currency devaluation on the industry’s bottom line.
More than 6.6 million passengers flew with the low-cost pioneer during the nine months of 2018 while the average seat load factor – or passengers carried as a percentage of available seats – for the same period stood at 80 percent.
Sheikh Abdullah Bin Mohamed Al Thani, chairman of Air Arabia said: “Supported by strong revenue figures and passenger demand; Air Arabia’s net profit for the third quarter and year to date remained strong despite profit margins being impacted by the sharp rise in fuel price and the currency devaluation witnessed in several key travel markets."
Revenue for the third quarter stood at AED1.28 billion, a 10 percent increase while net profit in the third quarter reached AED300 million, 20 percent lower than the corresponding 2017 figure.
More than 2.4 million passengers were served in the third quarter of 2018, a 5 percent increase on the corresponding period of 2017, while the average seat load factor stood at an impressive 81 percent.
Al Thani added: “The global economic outlook remains under renewed pressure and airlines worldwide have been challenged by pressured yield margins and increase in cost structure while political and economic tensions continue to drive currency and oil price volatility. We believe that such impactful challenges are temporary and the long term outlook for the low cost travel in the region remains fundamentally strong."
Air Arabia serves more than 150 destinations worldwide with a fleet of 53 aircraft, and plans for further expansion in 2019.