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Air Arabia Q4 net rises 12% on traffic

Low-cost carrier Air Arabia said on Monday that its 2013 fourth-quarter net profit rose 12 per cent, driven mostly by a growth in passenger traffic.

The Sharjah-based carrier, the region’s largest budget carrier, made a net profit of Dh94 in the fourth quarter, compared with Dh84 million in the corresponding 2012 period, the company said in a statement.

The carrier’s annual profit rose two per cent to Dh435 million and the Board of Directors have proposed 7.25 per cent per cent cash dividend for shareholders.

The company said it could once again deliver high levels of profitability and growth across the breadth of its operations.

Air Arabia, currently serving 90 destinations covering the Middle East, North Africa, Europe and the Indian Subcontinent, said its turnover for the last quarter 2013 surged eight per cent to Dh811 million from Dh753 million reported for the same period in 2012.

The airline carried over 1.5 million passengers in fourth quarter of 2013, an increase of 15 per cent compared to last quarter of 2012.

Shaikh Abdullah bin Mohammad Al Thani, Chairman of Air Arabia, said the carrier has enjoyed consistent and sustained growth since launching operations back in October 2003. “Our performance in the year of our tenth anniversary was no exception. The network expansion strategy which has guided the airline for a decade continued to reap rewards in 2013, helping us to once again deliver a strong set of results.”

Turnover for the full year stood at Dh3.2 billion, up 14 per cent compared to the same period in 2012. More than 6.1 million passengers flew with Air Arabia in 2013, a 15 per cent increase compared to 5.3 million passenger carried in 2012. The airline’s seat load factor — or passengers carried as a percentage of available seats — for the full year ending December 31, 2013, stood at impressive 80 per cent.

“We are extremely confident about the long-term fundamentals of the aviation sector in the region and believe we have the right business model, operating base and infrastructure in place to cement our position as the region’s leading low-cost carrier operator. We will continue to explore opportunities and enter into new ventures that will best serve the airline’s ambitious growth plans and at the same time provide highest returns to our shareholders,” Al Thani said.

These results were announced following a meeting of the Board of Directors of Air Arabia today who have proposed a dividend distribution of 7.25 per cent of capital, which is equivalent to 7.25 fils per share. This proposal is subject to ratification by Air Arabia shareholders at the company’s upcoming Annual General Meeting.

Air Arabia added eight destinations to its network in 2013, including Yerevan in Armenia; Lar and Mashhad in Iran; Baghdad in Iraq; Sialkot in Pakistan; Abha, Ha’il and Hofuf in Saudi Arabia. The airline took delivery of seven new A320 aircraft from Airbus in 2013, bringing its total fleet size to 35.

The budget carrier, which marked 10 years of operation in 2013, was named “Low-Cost Carrier of the Year” at the Aviation Business Awards 2013.

Early this month, Air Arabia signed a landmark deal with the Ras Al Khaimah Department of Civil Aviation to become the official carrier of the emirate by launching its services to various regional destinations from Ras Al Khaimah International Airport in minimum possible time.

Adel Ali, group chief executive officer, Air Arabia told Khaleej Times that the carrier would soon finalise operational details as it continued to explore and assess other opportunities to expand regional presence in response to customer demand.

Air Arabia, which commenced operations in October 2003, currently operates a total fleet of 34 Airbus A320 aircraft from three hubs — the UAE, Morocco and Egypt. The DFM-listed airline will become the first UAE-based airline to operate from two airports of the country.

According to the International Air Transport Association, the Middle East airlines recorded the strongest increase in passenger traffic in 2013, a rise of 12.1 per cent compared to 2012, but below the 15.4 per cent growth recorded in 2012 compared to 2011.

— issacjohn@khaleejtimes.com