Air Arabia profit falls 51% to Dh374m as Middle East conflict hits flights and fuel costs

SHARJAH: UAE budget carrier Air Arabia’s net profit fell 51 per cent to Dh374 million in the first half of 2026 as the regional conflict disrupted flights, reduced capacity and pushed fuel prices to record highs.

The Sharjah-based low-cost carrier reported revenue of Dh3.48 billion for the six months to June 30, down 1 per cent from Dh3.52 billion in the same period last year.

The airline carried more than 8.7 million passengers across its operating hubs in the first half, a 14 per cent decline year on year. Air Arabia said the fall reflected reduced operating capacity caused by the ongoing regional conflict.

Despite carrying fewer passengers, the airline maintained an average seat load factor of 83 per cent. This measures the proportion of available seats filled by passengers and indicates that demand remained relatively strong across its network.

The conflict, which began in February, affected airline operations through airspace closures, temporary restrictions and reduced capacity. Air Arabia also faced record-high fuel prices during the period.

However, the impact has been felt across the global airline industry. Austrian Airlines reported a €93 million adjusted EBIT loss in the first half of 2026, with the Middle East conflict pushing its fuel costs more than €60 million higher than a year earlier.

Pegasus Airlines also swung to an operating loss in the second quarter, while Philippine Airlines reported a $25.1 million net loss for the first half.

The wider pressure is reflected in IATA forecasts that Middle Eastern airlines will move from a $7.2 billion profit in 2025 to a $4.3 billion loss in 2026.

Second-quarter profit plunges 77%

The pressure was more pronounced in the second quarter.

Air Arabia reported a net profit of Dh96 million, down 77 per cent from the same quarter last year. Revenue fell 3 per cent to Dh1.68 billion.

The airline carried more than 3.9 million passengers during the quarter, down 23 per cent year on year, while its average seat load factor stood at 81 per cent.

Air Arabia Chairman Sheikh Abdullah Bin Mohammad Al Thani said the airline's ability to remain profitable reflected the resilience of its business model and financial position.

“The conflict significantly impacted the industry through multiple airspace closures, reduced operating capacity, and rising operating costs driven by record-high fuel prices,” he said.

He added that the airline remained focused on maintaining network connectivity, adapting operations and controlling costs while preserving operational efficiency.

Air Arabia adds six aircraft

Despite the disruption, Air Arabia expanded its fleet by six aircraft during the first half, taking its total fleet to 96 owned and leased Airbus A320 and A321 aircraft.

The carrier also launched five new routes across its operating hubs in the UAE, Morocco, Egypt and Pakistan.

Air Arabia said it was confident in its business fundamentals as market conditions improve.

“Supported by a robust business model, a disciplined financial approach, and continued demand for our value-driven product, we remain committed to serving our customers, expanding our network responsibly, and creating sustainable long-term value for all our stakeholders,” Sheikh Abdullah added.