Air Arabia reports record second-quarter earnings due to robust demand for air travel

Air Arabia, the UAE's sole publicly listed budget airline, experienced a significant surge in its second-quarter profit, marking nearly a threefold increase. The boost in profit, reaching a record Dh459 million ($124.96 million) for the three months ending in June, compared to Dh160 million in the corresponding period the previous year, was attributed to a higher volume of passengers amid sustained robust demand for air travel. The second-quarter revenue also witnessed a notable rise, escalating by 25 per cent year-on-year to Dh1.39 billion. This impressive financial performance was propelled by a 37 per cent increase in the number of passengers carried, totalling 3.8 million across Air Arabia's seven airports during the three months. Surpassing analyst expectations, both in profit and revenue, the airline outperformed the consensus estimates of Dh284.7 million and Dh1.35 billion, respectively. During the second quarter of 2023, Air Arabia achieved an average seat load factor of 76 per cent, signifying the efficiency with which the airline filled available seats. This performance metric is crucial for assessing operational effectiveness in maximizing passenger capacity.

“Air Arabia’s strong performance in the second quarter of this year is a testament to the resilience and effectiveness of the business model we operate, our steady performance in the first quarter continued to the second quarter, underlining the consistency of our growth strategy and operational excellence. Our team’s dedication continues to drive sustained momentum across our businesses,” said Sheikh Abdullah bin Mohammad Al Thani, chairman of Air Arabia.

The heightened demand observed this summer is a clear indicator of a rebound in air travel, with passengers increasingly venturing abroad for holidays following the subdued travel activity induced by the pandemic. This positive trend was mirrored across the aviation sector in the Middle East and globally, with many airlines reporting increased profits and healthier financial standings during this quarter.

In the initial half of 2023, Air Arabia experienced a remarkable surge in net profit, marking a 78% increase on an annual basis, totalling Dh801 million. The airline's half-yearly turnover also witnessed a substantial rise of 26% year on year, reaching Dh2.82 billion. Throughout this reporting period, Air Arabia successfully transported 7.7 million passengers, achieving an impressive average seat load factor of 81%. The airline operates from seven key airports, including Sharjah, Ras Al Khaimah, Abu Dhabi, Morocco, Egypt, Armenia, and Pakistan. Air Arabia continued its strategic expansion during the first six months of the year by incorporating three new aircraft into its fleet, elevating the total to 71 owned and leased Airbus A320 and A321 jets. Additionally, the carrier extended its network by introducing 18 new routes from January to June. Despite the dynamic changes in the macroeconomic and geopolitical landscape, Air Arabia remains steadfast in its commitment to driving profitability and maintaining operational efficiency. The airline emphasizes the implementation of prudent financial and cost-control measures to navigate the challenging environment. Looking ahead, the airline's chairman expressed confidence in the company's capability to sustain growth while delivering unparalleled value-driven travel deals to its passengers.