Sharjah: Air Arabia announced that its third quarter net profit increased 126 per cent to Dh226 million, from Dh100 million for the same period last year, in a statement on Monday.
The Sharjah-based low-cost carrier also announced that its turnover for the third quarter reached Dh836 million, an increase of 19 per cent compared to the same period last year.
“The sustained profitability and solid growth margins signal that Air Arabia is on a steady growth trajectory,” said Shaikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia, in a statement. “The extremely positive financials further validates our concerted efforts to unlock opportunities for the low-cost model, which is pioneered by Air Arabia in the wider Arab region, while continuously making air travel accessible to millions of customers every year,” he added.
The low-cost airline has also recorded a 14 per cent increase in passenger traffic to over 1.3 million in the third quarter of this year and an average seat load factor, or passengers carried as a percentage of available seats, of 82 per cent.
“The key driver here is the proliferation of routes not served by full service airlines - carriers like Air Arabia and flydubai are capitalising on this, especially as the population around a 5hour flight radius of the GCC tops over 2.5 billion people,” said Saj Ahmad, chief analyst at StrategicAero Research, a private consulting firm operating in Europe and the Middle East. “This year, Air Arabia will top profit forecasts as well as maintain and improve load factors which are already at over 82 per cent,” he said.
The airline’s net profit for the first nine months of 2012 stood at Dh342 million, up 75 per cent compared to Dh195 million for the same period in 2011. For the first nine months, the company also registered a turnover of Dh2.187 billion, an increase of 21 per cent compared to the same period last year. The airline served more than 3.9 million passengers during the first nine months of 2012, an increase of 12 per cent compared to the same period last year.
According to Al Thani, there are great opportunities for low cost travel segment in the region and Air Arabia will remain focused on capitalising on the existing potential and securing best return-on-investment for its shareholders, adding that the airline will continue to enter new markets and launch new ventures.
In the past quarter, Air Arabia added three new destinations: Erbil in Iraq, Uffa in Russia and Odessa in Ukraine. It also expanded operations from its hubs in Morocco and Egypt, and announced the launch of four additional routes in October 2012, bringing Air Arabia’s global network to 81 destinations.
“Their key base in Sharjah is vital to their growth as there is a lot more capacity there to be exploited and that’s exactly what Air Arabia is doing - as is by extension the whole of the UAE,” Ahmad said.