The UAE-based budget airline Air Arabia has reported a US$19.3 million profit for the first quarter of the year, 45% less compared to last year’s figure for the same period (US$34.87 million).
Despite recording a strong start in January, the largest low-cost airline in the region, and in the North African market, has blamed the current Coronavirus outbreak and the consequent fall in air-travel demand for the results. Likewise, revenue has fallen 12% to US$245.3 million compared to the first quarter of 2019, the company has said in a statement.
An Air Arabia Airbus A320. Photo by Air Arabia
Additionally, 2.4 million passengers flew Air Arabia from January to March 2020, standing at 14% less compared to last year, but at 83%, still representing an impressive load-factor compared to other carriers.
Chairman Sheikh Abdullah Bin Mohamed al-Thani stated that “The outbreak, (along with) airport closures, travel restrictions and low travel demand have impacted overall performance in Q1” although the airline had “witnessed a strong start of the year across the breadth of its operations”. He also expressed his content regarding the solid performance despite the exceptional circumstances, and attributes such achievement to having “reacted quickly” and “taken a series of business decisions to control fixed and running costs during this period while supporting the business continuity.”
Moreover, he stressed on the carrier’s “flexible and robust business model” while being “confident in the strength of the aviation industry worldwide and its crucial role in supporting economic recovery post COVID-19.” Lastly, he pointed out their engagement to ensure a proper service by “adhering to the highest international safety standards.”
Air Arabia, headquartered in Sharjah and which serves from three other hubs located in 3 different countries (from Ras Al Khaimah within the Emirates, and the other two in Egypt and Morocco), had just announced last month that it received an Air Operating Certificate (AOC) to operate flights from the capital Abu Dhabi starting in the second quarter of 2020.
Air Arabia Abu Dhabi, which was formed as a joint venture along with Etihad Airways, emerged as a response to growing demand for cheap air travel demand from the city. However, the new venture is set to take to the skies only when market conditions improve and “as soon as skies and airports open," said Adel Ali, Group Chief Executive of Air Arabia.
Earlier this month the company laid off 57 of its 2,000 workforce, lamenting that “it was an unfortunate decision” and that “it was the first time in their history that they were forced to do so taking into account the current market realities,” while adding that “they would continue to do everything possible to keep layoffs to the minimum and only as a last resort.” a spokesman said.
Currently, the airline is involved both in cargo and repatriation flights, and has implemented booking flexibility measures following the trend of most airlines around the globe in order to better serve the new necessities of their customers.