Dubai: Air Arabia reported on Saturday a 6 per cent fall in third quarter profit despite increasing revenues and carrying more passengers over the period.
The UAE’s only listed carrier made Dh235 million in profit in the three months to September 30, 2015, less than the Dh251 million it made a year ago, according to an emailed statement.
Air Arabia did not give reason for the drop, however, in recent quarters the airlines fuel hedging strategy has hampered profits. Forty-five per cent of Air Arabia’s fuel requirements in 2015 are hedged at $90 a barrel while benchmark Brent crude has trade between $65 and $45 a barrel this year.
Revenue over the period climbed 6 per cent to Dh1.1 billion compared to Dh1 billion in the corresponding period last year. The number of passengers increased by 18 per cent to 2 million passengers with the airline filling on average 80 per cent of seats.
“Despite increased pressure on yield margins, spare capacity in the market and protracted political uncertainty within the region, Air Arabia continues to deliver strong profits and solid business growth,” stated Air Arabia Chairman Shaikh Abdullah Bin Mohammad Al Thani.
Over the first nine months of the year to September 30, Air Arabia made Dh472 million in profit, 5 per cent less than a year ago. Revenues increased 2 per cent to Dh2.87 billion over the period. The number of passengers carried increased 11 per cent to 5.7 million with the airline filling on average 79 per cent of seats.
Air Arabia added 21 new routes to its network in the first nine months of 2015, increasing the total number of destinations to 115 routes.
Al Thani said the airline is “focused on expanding operations and entering new markets while consolidating ... in existing markets.”
