Air Arabia halts FlyYeti unit on Nepal concerns

Dubai: FlyYeti.com, the budget airline majority owned by Air Arabia, will suspend operations starting mid-July, only six months after it began, due to political uncertainty in Nepal.

The company said its ability to renew aircraft leasing agreements, which expire mid-July, had been impaired, citing "the political environment", according to a statement posted on the flyyeti.com website.

FlyYeti said it hoped to resume operations when conditions stabilise.

"The current uncertainty, combined with a difficult operating conditions in Nepal and a presently opaque regulatory environment, has led the management of FlyYeti.com to decide that it is in the best interest of the company and its passengers to temporary suspend operations," the group said.

Air Arabia is one of two listed airlines in the Gulf. Profit at the airline probably accelerated to Dh101.6 million in the second-quarter after shifting routes and adding planes, but high oil prices should hit margins.