Sharjah- based low cost carrier Air Arabia posted a 20 per cent year-on-year drop in net profit for the third quarter of the year to reach Dhs300m, it announced on Tuesday.
However, revenues during the period rose 10 per cent to reach Dhs1.28bn, a statement said.
Net profit during the first nine months of the year also fell by 17 per cent year-on-year to reach Dhs530m, although turnover reached Dhs3bn, up 8 per cent compared to Dhs2.8bn registered during the same period last year .
The airline blamed the drop in profit on the strong impact of high oil prices and currency devaluation.
Oil prices soared to record highs of above $75 a barrel in June 2018 — the highest level since November 2014 — before dropping back to about $70 a barrel.
Sheikh Abdullah Bin Mohamed Al Thani, chairman of Air Arabia said: “Supported by strong revenue figures and passenger demand, Air Arabia’s net profit for the third quarter and year to date remained strong despite profit margins being impacted by the sharp rise in fuel price and the currency devaluation witnessed in several key travel markets.
“The global economic outlook remains under renewed pressure and airlines worldwide have been challenged by pressured yield margins and increase in cost structure while political and economic tensions continue to drive currency and oil price volatility.
“We believe that such impactful challenges are temporary and the long term outlook for the low cost travel in the region remains fundamentally strong,” he added.
The airline also stated that it carried over 2.4 million passengers in Q3 – a 5 per cent increase compared to Q3 2017, while more than 6.6 million passenger flew with the low-cost airline between January to September.
Air Arabia also grew its global network to 150 destinations year to-date served from hubs in the UAE, Morocco and Egypt, with a fleet of 53 aircraft.
The airline, which marked 15 years of operations in October this year by unveiling a new brand identity, also confirmed plans for further expansion in 2019.
“Air Arabia’s continued focus on generating profitable growth combined with strong cost control measures will continue to deliver robust financial performance,” said Al Thani.
All regional airlines have been hit hard by high oil prices and currency volatility.
On Tuesday, officials from Emirates and flydubai warned that profits have been badly affected by rising fuel prices.
Read more: Emirates’ profit has been badly hit by higher fuel prices – official