Dubai: Air Arabia, the Sharjah-based low cost carrier, on Monday reported a 27 per cent jump in first quarter net profit to Dh75 million on the back of improving jet fuel prices.
“Profit continues to benefit from a more conducive fuel environment,” stated Will Horton, senior analyst at CAPA – Centre for Aviation.
Revenue for the three months ending March 31, 2013, increased 13.5 per cent to Dh827 million, compared to Dh722 million in last year’s first quarter.
Highlighting the airline’s performance in the first quarter, Air Arabia stated that the result reflect its “solid financials, strong business model and broad customer base.”
The UAE’s only publicly-listed airline, Air Arabia carried 1.63 million passengers in the first quarter.
The 12 per cent increase in passengers, up from 1.45 million in last year’s first quarter, comes on the back of newly launched routes from Sharjah to Cairo in Egypt, Antalya in Turkey, and Shymkent in Kazakhstan. Average load factor for the first three months stood at 81.5 per cent.
“We remain confident about the long-term prospects for the industry and fully intend to continue spreading our value-for-money philosophy to more destinations and more passengers in the future,” stated Shaikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia.
However, Air Arabia has not been safeguarded from global volatility in the first quarter. It has reportedly suspended flights to Donetsk in the east of Ukraine, which is the latest city to come under control of pro-Russian militias. It has also reduced frequencies to Kiev and Odessa.
The results, however, do not include newly launched operations from Ras Al Khaimah, which is the airline’s fourth hub after Sharjah, Alexandra in Egypt and Casablanca in Morocco.
Serving seven destinations, Air Arabia launched operations from Ras Al Khaimah last week, having now become the designated carrier for the emirate following the collapse of RAK Airways earlier this year.
“The next two quarters will show how much of a benefit Air Arabia will have from reduced movements at Dubai International, and later this year and early next year if any of the added traffic from the runway works sticks to Air Arabia,” Horton said.
Air Arabia shares closed on the Dubai Financial Market (DFM) down 2.03 per cent to Dh1.45. The results were released after markets closed on Monday.
