Air Arabia’s 1H15 results strong despite challenging conditions

?Air Arabia’s financial results for the first half of 2015 (1H15) show a turnover of AED1.75 billion, which remains in line with the corresponding period of 2014 even though turnover for the three months ending 30 June 2015 (2Q15) stood at AED 860 million, 6% down on 1H14.Whilst 3.6 million passengers flew with Air Arabia during 1H15, an increase of 9% year-over-year, there was a decline in net profit of 4% to AED237 million. The carrier says this was mainly driven by pressured yield margins due to market conditions as well as a number of strategic investments made by the airline in first half 2015 which will begin to fully deliver value in the near future.These developments were also reflected in Air Arabia’s 2Q15 results. Net profit stood at AED 152 million, which is 12% less than 1H14 even though passenger numbers increased by 4% to reach 1.8 million.The airline’s average load factor during 1H215 stood at 79%.Chairman of Air Arabia, Sheikh Abdullah Bin Mohammad Al Thani, commented, “The first half 2015 has seen Air Arabia taking major steps in investing in its growth. We have launched ‘Air Arabia Jordan’ following the completion of a strategic acquisition as well as invested in new routes and capacity increase across the group’s operating hubs, which today provide our customer with access to over 115 routes across the world.“The economic performance from Russia and CIS countries and the impact of oil prices on the global economy in addition to regional political instability have all served to put pressure on yield margins across the entire aviation sector. We are confident that these factors are temporary and will be mitigated in the coming quarters when the long-term investments we have made into the business, come fully on stream.”In total, Air Arabia added 15 new routes to its network during 1H15. The period also witnessed the launch of “Airewards”, the first ever rewards programme from a low-fare airline in the MENA region.

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