Low-cost carrier Air Arabia has reported a net profit of Dh160 million for the first half of 2008, which is 39 per cent higher than Dh115m for the first six months of last year, as a result of higher passenger numbers and increased seat load factor.
In a period of troubling times for the airline industry worldwide, the Sharjah-based carrier said that it carried more than 1.6 million passengers in the first half of 2008, up 33 per cent, while the average seat load factor reached 86 per cent during the same period.
Air Arabia shares closed yesterday on the DFM at Dh1.60, down 0.01.
Chairman Sheikh Abdullah bin Mohammed Al Thani said in a statement that the increased profits came "during a period of unprecedented challenges for the global aviation industry as a result of the soaring oil price".
"We are proud of these results, which demonstrate Air Arabia's ability to continue to deliver sustained growth and excellent returns to our investors. We believe that Air Arabia enjoys the proper model and infrastructure needed to remain amongst the most profitable airlines in the world," he said.
"Focusing on organic expansion and operational reliability, Air Arabia will remain committed to providing comfort, convenience and value-for-money service to our passengers, and continually upgrading our destination network to serve the widest number of cities in the Middle East, North Africa, South and Central Asia," he added.
Air Arabia's net profit for the second quarter of this year reached Dh82m, up 14 per cent compared to Dh71.7m for the second quarter of 2007.
During the first half, the company registered a turnover of Dh871m, up 70 per cent from Dh513m for the first half of 2007. Air Arabia's turnover for the second quarter of this year reached Dh487m, up 79 per cent compared to Dh272m for the second quarter of 2007.
A senior airline official told Emirates Business that the current high oil prices are putting pressure on the bottom lines of all airlines worldwide, and the Sharjah carrier is no exception.
According to him, the challenges for Middle East carriers are different from other carriers since aviation sector in the region was seeing double-digit growth as well as higher passenger numbers.
He added that the carrier also introduced four new destinations in the first six months of this year, including Kozhikode and New Delhi, India; Shiraz, Iran; and Dhaka, Bangladesh. This increases Air Arabia's total network to 41 destinations across the wider region.
Air Arabia plans to launch two to three new routes later this year, including one to Kiev (Ukraine) in October.
"Air Arabia has the biggest network among the regional carriers in India with 11 destinations," he said.
The airline served more than 1.6 million passengers during the first half of 2008, a 33 per cent increase compared to 1.2 million passengers during the same period last year. Air Arabia served 866,272 passengers in the second quarter of this year, up 34 per cent compared to 646,000 passengers in the second quarter of 2007.
For the first six months of this year, Air Arabia's average seat load factor – or passengers carried as a percentage of available seats – stood at 86 per cent, up 3.6 per cent compared to the same period in 2007.
In June-end, Air Arabia said it has carried more than 10 million passengers since launch in October 2003, officially passing the mark at the end of June 2008.
The higher oil prices has impacted the profitability of the airline industry worldwide. The International Air Transport Association (IATA) has said that the airline industry is expected to make a loss of $2.3 billion (which is based on oil price of $106.5) in 2008.