Dubai: “First quarter net profit increased 34 per cent to Dh114 million compared to Dh85 million in the same period last year,” declared Air Arabia on Monday
The Dubai-listed low-cost airline said its strong financial results for the March quarter of 2016 exceeded analyst expectations as it continued to deliver outstanding performance and attract new customers.
Air Arabia share price increased by more than 2.4 per cent to Dh1.27 in early trading on the Dubai Financial Market. In the March quarter, the airline posted a turnover of Dh946 million, showing an increase of seven per cent on Dh886 million in the first quarter of last year.
The airline flew more than 2.1 million passengers between January and March 2016, up 17 per cent on the corresponding period of last year.
Chairman of Air Arabia, Shaikh Abdullah bin Mohamed Al Thani, said: “Air Arabia has made an excellent start to 2016, maintaining the momentum we established last year and attracting new customers to our brand. Our operational efficiency allied to the success of our route expansion strategy and the popularity of our value-add service proposition, leaves Air Arabia well placed to navigate the current macroeconomic challenges and benefit from the many opportunities in the region’s aviation sector.”
Chief analyst at StrategicAero Research Saj Ahmad, said: “Air Arabia’s impressive profit jump of 34 per cent on the back of just a seven per cent rise in turnover speaks to the sharp and efficient cost reduction strategy that has delivered robust financial returns in this first quarter. As one of the key low-cost airlines in the GCC, Air Arabia has managed to navigate around regional areas facing angst such as Egypt and slower growth seen in markets like Jordan to firmly establish Sharjah as a pivotal gateway for price-sensitive travellers.”
Ahmad added: “It’s a brilliant start to the year for Air Arabia, notwithstanding the benefit of a lower fuel price environment — but the airline will soon have to seriously start planning for its future fleet between the A320neo or 737MAX if it doesn’t want to get left behind, especially when the roaring and runaway success of flydubai and its 75+25 jet order for the 737 MAX 8 will put it in pole position for low-cost airline growth in the coming few years.”
Air Arabia added two new routes from its main hub in Sharjah in the first three months of 2016, both of which strengthened its presence at the intersection of Europe and Asia. In March, it began direct flights between Sharjah and Sarajevo, the capital city of Bosnia and Herzegovina, bringing this popular and historic city within easy reach of UAE visitors.