Dubai: Air Arabia reported on Thursday a 7 per cent increase in its net profit for the first quarter of 2018 as revenues rose and expenses dropped.
The Sharjah-based budget carrier’s profit reached Dh110 million, up from Dh102.5 million in the same quarter in 2017.
Air Arabia’s revenue also rose by 8 per cent to reach Dh877.3 million, up from Dh810 million in the first quarter of 2017. Over two million passengers flew with Air Arabia in the quarter, in line with the passenger figures in same period last year.
Shaikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia, attributed the growth in earnings to strong passenger demand coupled with cost-cutting measures the business took to drive cost margins lower.
While direct costs rose by around 8 per cent year-on-year, the company cut its general and administrative expenses by around 19 per cent to reach Dh38 million in the first quarter.
“We remain optimistic about the prospects of low cost air travel in the wider region and our ability to continue to report sustained profitability and achieve solid growth margins across our network,” the chairman said in a statement.
Adel Ali, Air Arabia’s chief executive officer, earlier in May said he expected 2018 to be a “reasonable year,” and dismissed concerns about higher oil prices hurting the company’s finances by raising fuel costs.
Ali said that higher oil prices boost economic growth, which in turn translates to stronger passenger demand for air travel.
“What’s the point of filing an aircraft with low (cheaper) oil but low passenger [numbers]?” he said during a conference in Abu Dhabi.
According to its statement, Air Arabia’s average seat load factor was 80 per cent during the first quarter of this year.
Sanat Sachat, equity research analyst at Al Mal Capital, said the carrier has managed to grow its bottom line by focusing on cost optimisation in what he described as a “tough macro environment.”
“They have one of the best utilisation rates in the sector, and we believe the next leg of growth will come from four routes to be launched this year and further cost optimisation,” he said.
Air Arabia added three new routes from its hubs in the UAE and Egypt in the first three months of 2018, including Moscow Sheremetyevo, Jeddah, and Kuwait. The airline then announced new flights from Sharjah to destinations in Azerbaijan, Turkey, and elsewhere in Russia for 2018.
Share prices of the Dubai-listed company inched down 0.85 per cent on Thursday to close at Dh1.17.
RAKBank and Air Arabia launch Mastercard co-branded credit card
Dubai: RAKBank partnered with Air Arabia and Mastercard to launch a co-branded Mastercard Platinum Credit Card, which cardholders can use globally for purchases and cash withdrawals. Air Arabia has an innovative loyalty programme called Air Rewards that is based on spend rather than miles.
Customers subscribing to the new co-branded credit card will immediately earn a joining bonus of 15,000 Air Rewards that will, in time, get them access to free flights and more rewards from Air Arabia.
Additionally, ‘Air Rewards’ can be accumulated whenever cardholders make a purchase in the UAE or internationally on their co-branded Card, which can be redeemed conveniently all year round in the form of flights, meals and baggage vouchers with Air Arabia.
“Over the years, the Bank managed to transform the concept of card reward programmes in the UAE through a host of unique features and now we are extending Air Arabia’s Air Rewards loyalty programme to our cardholders,” said Peter England, RAKBANK CEO.
The Air Arabia co-branded Mastercard Platinum Credit Card also offers a zero per cent easy payment plan of up to 12 months without a processing fee. Likewise, cardholders will benefit from the complimentary Sharjah Airport drop off and pickup services to and from anywhere in Dubai or Sharjah.
“This new card will add tangible value to our frequent travellers and offer them attractive opportunities to earn Air Rewards points and redeem it for complimentary flights and other services,” said Adel Al Ali, Group Chief Executive Officer of Air Arabia.