Air Arabia second quarter net profit falls 13.6 per cent
Budget carrier Air Arabia , the UAE’s only publicly listed airline, reported a 13.6 per cent fall in second-quarter net profit on Thursday.
The Sharjah-based firm made a net profit of AED126.4 million ($34.4 million) in the three months to June 30, compared with a profit of AED146.3m in the corresponding period of 2015.
EFG Hermes and SICO Bahrain had forecast the airline would make a second-quarter profit of AED136.6m and AED110.4m respectively.
The airline said the drop in the net profit was driven by “regional shift in traffic in the second quarter due to the month of Ramadan and the excess in capacity available in the market which is affecting airlines’ yield margins.”
Air Arabia had already reported declining profits in three of the preceding four quarters.
The airline’s second-quarter revenue was AED893.8m, higher than the AED860.2m it posted in the same period a year earlier.
The carrier’s first half net profit rose 3.5 per cent to AED245m, compared to the AED 237m reported for the same period last year.
It flew 4.1m passengers during the first six months ending June 30, up 14 per cent on the corresponding period last year.
“Despite the continuous pressure on yield margins that airlines are witnessing and the challenges associated with the regional economic outlook, Air Arabia continues to deliver solid financial performance and momentum growth,” said Sheikh Abdullah Bin Mohamed Al Thani, Chairman of Air Arabia.
“We remain optimistic about the outlook of low-cost travel in the wider region as we continue to focus on further expanding our network and operational efficiency as well as leveraging on emerging travel trends by delivering even more value to our customers,” Al Thani added.
(With inputs from Reuters)