Air Arabia: Q1 Net Profit Falls 51%

07.05.2010 Aviation

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UAE-based low cost carrier Air Arabia, which is facing growing competition in the Gulf region, said first-quarter net profit declined 51 percent on higher fuel costs and pressure on yield margins.
The Arab world's largest listed airline made a net profit of 50 million dirhams ($13.62 million), compared to a profit of 103 million dirhams in the first quarter of 2009, it said in a statement on Thursday.   
Earnings fell short of an average forecast of 79.8 million dirhams in a Reuters survey in April.
"The lingering impact of the global financial crisis and the rise in fuel cost continues to affect the profitability of airlines worldwide," the firm's Chief Executive Adel Ali said in the statement.
Air Arabia's business is also under pressure from rivals including Kuwait's Jazeera Airways and Dubai-owned flydubai, as well as from bigger carriers struggling to cope with a sharp drop in international passenger travel.
The number of passengers in the quarter rose to 1 million, up 9.2 percent from the first quarter in 2009, while its average seat load stood at 80 percent for the three months ending March 31.
Turnover for the quarter rose 4 percent to 482 million dirhams, it added.    
The airline will begin operations at its third hub in Egypt in the first half of 2010, it said in February. The airline, set up approximately six years ago, already has a hub flying from Morocco as it looks to diversify away form increased pressure in its home market.
It made a profit of 115.4 million dirhams in the fourth quarter.

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