Bloomberg News

Air Arabia Profit Drops 26% as Arab Spring Hurts Discount Demand

November 01, 2011

Nov. 1 (Bloomberg) -- Air Arabia PJSC, the Middle East’s biggest discount airline, said third-quarter profit declined 26 percent, hurt by higher fuel prices and political unrest during the “Arab Spring.”

Net income fell to 100 million dirhams ($27 million) from 136 million dirhams a year earlier, the carrier, based in Sharjah in the United Arab Emirates, said in a statement today.

“Challenging markets conditions continued in the third quarter, with a further escalation in the political turmoil in several countries and an upward trend in the average fuel bill,” Chairman Sheikh Abdullah Bin Mohammad Al Thani said.

Air Arabia halted plans to establish a hub in Jordan during the summer amid concern about uprisings in the Middle East and North Africa. Revenue increased 22 percent to 691 million dirhams in the third quarter, the carrier said, with passenger numbers up 5 percent to 1.2 million and the load factor, a measure of seat occupancy, at 81 percent.

EFG-Hermes forecast a profit of 120 million dirhams, according to data compiled by Bloomberg.

Air Arabia stock closed down 0.5 percent at 63 fils in Dubai before the results were announced, taking declines this year to 23 percent.

--Editor: Chris Jasper.

To contact the reporter on this story: Tamara Walid in Abu Dhabi at twalid@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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