Business | Aviation
Air Arabia purchases 10 new Airbus A320s to expand fleet
Air Arabia has acquired 10 new Airbus A320 aircraft in line with the airline's expansion plans, the company said yesterday.
- By Natasha Marrian, Staff Reporter
- Published: 23:42 November 12, 2008
Dubai: Air Arabia has acquired 10 new Airbus A320 aircraft in line with the airline's expansion plans, the company said yesterday.
The list price of the A320, according to Airbus, is $77 million (Dh282.7 million) each, bringing the amount spent by Air Arabia to an approximate $770 million on the ten planes.
"Our vision is to be one of the world's leading low cost carrier's in terms of profit margins, innovation, reputation and operational excellence, and having the A320 at the heart of our fleet is the best and quickest way we can achieve this," said Air Arabia chairman Shaikh Abdullah Bin Mohammad Al Thani.
"Following Air Arabia's expansion plans and the new hub in Morocco, expected to operate next year, expanding the fleet size is certainly a need," he added.
"The Airbus A320 aircraft has an outstanding success record throughout the world and is ideal for our needs and those of our customers."
Air Arabia announced a 30 per cent increase in its third quarter net profits to Dh214 million, compared to Dh165 million during the third quarter of 2007.
The company posted a turnover of Dh625 million, up 69 per cent compared to Dh369 million during the third quarter of last year.
According to Air Arabia spokesman, Housam Raydan, while most airlines had responded to the oil price increases by embarking on cost cutting measures, Air Arabia had the cost-saving philosophy already entrenched in its business model.
"The high oil price, the instability of the oil price and the world economic slowdown has put pressure on everybody in the transport sector and on company bottom lines ... Air Arabia is a low cost carrier and at the end of the day that was part of our business model.
"We remained truly loyal to the low cost model," he said.
Share price increases
Another factor counting in the carrier's favour, said Raydan, was that many travellers turn to low cost carriers during times of crisis.
Many larger airlines were forced to increase fuel surcharges, hiking the cost of fares.
Air Arabia reported an average seat load factor of 87 per cent in the third quarter of 2008 it served 978,794 passengers, an increase of 34 per cent compared to 729,745 passengers during the same period in 2007.
The company's share price increased by one percentage point at the close of trade yesterday, bringing the price to Dh1.01, after a decrease of 15 per cent over the last week.
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