Arif Naqvi, the founder of UAE’s Abraaj Capital, has resigned from the board of low-cost airline Air Arabia, the carrier announced in a bourse statement.
During a meeting on Thursday, August 9, Air Arabia’s board of directors discussed the resignation of board member Arif Naqvi, a brief statement said.
“The board will nominate a replacing member within the coming weeks,” it added.
Naqvi’s resignation comes after Air Arabia confirmed in June that it had an exposure of $336m to debt-ridden Abraaj, which filed an application for provisional liquidation in the Cayman Islands.
Air Arabia said it has an investment in Abraaj funds, without elaborating further on its exposure.
Announcing its financial results on Thursday, the airline confirmed that the financial exposure it has Abraaj is limited to the group’s investment portfolio and that there is “no significant impact on Air Arabia’s business or on its liquidity status”.
“As the court-supervised restructuring of Abraaj’s financially stressed funds is currently taking place, Air Arabia’s appointed team of experts continue to be actively engaged with the appointed joint provisional liquidators as well as all stakeholders and creditors involved in this matter to ensure that the rights of investors – including Air Arabia – are preserved,” the statement said.
Air Arabia reported a net profit of Dhs230m for the first half of the year, a 12 per cent decrease compared to Dhs261m posted during the same period last year.
The airline said it remained profitable despite the “economic pressure that airlines have witnessed in the second quarter of this year, which was driven by lower yield margins, higher fuel prices and seasonality shift in traffic that the market has experienced”.
The airline flew 4.2 million passengers during the first half of 2018 and its average seat load factor for the first six month of 2018 – passengers carried as a percentage of available seats – stood at 79 per cent.