Air Arabia’s Q1 net profit plunges by 22%, despite network expansion

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Sharjah-based Air Arabia reported a 22 per cent drop in first-quarter profit on Monday, despite robust passenger demand and ongoing network expansion.

The budget carrier’s profit for the January-March period plunged to Dhs226m, compared to Dhs342m during the same period a year earlier.

The company said the seasonality shift in Ramadan, higher fuel prices, currency fluctuations in key markets and ongoing supply chain challenges hurt its profit in Q1 2024.

“We are confident in our ability to navigate through market challenges and capitalise on new opportunities while ensuring we continue to deliver the best value for our customers and shareholders,” said Sheikh Abdullah Bin Mohammad Al Thani, the chairman of Air Arabia.

“As we navigate the current geo-political challenges and the prolonged supply chain disruptions that the global aviation industry continues to face, we remain steadfast in our growth plans for 2024, building upon the strength of the business model we operate.”

📈 Air Arabia reports strong first quarter net profit of AED 266 million, backed by 8% increase in turnover and more than 4.4 million passengers carried.
Read more https://t.co/UXxD96qcQ7 pic.twitter.com/UVP5sMcjdj

— Air Arabia (@airarabiagroup) May 13, 2024

However, the company’s turnover for the same period jumped by 8 per cent to reach Dhs1.54bn from Dhs1.4bn in the corresponding period last year, as the demand for air travel continues to increase.

Air Arabia carried more than 4.4 million passengers across its operating hubs in the three months to March 31, a 13 per cent increase compared to the 3.9 million customers it served in Q1 2023. Its average seat load factor stood at 85 per cent.

The airline added two new routes to its global network from its operating hubs in the UAE, Morocco, Egypt, and Pakistan during the period under review. It has a total fleet of 74 owned and leased Airbus A320 and A321 aircraft.

The airline liquidity in Q1 2024 stood at Dhs5bn in cash and cash equivalent.

Read: Air Arabia Egypt launches direct flights to Istanbul