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UAE-based budget carrier Air Arabia recorded a 7% decline in net profit for the second quarter of the year amid rising costs and geopolitical uncertainties, although turnover rose significantly on higher passenger numbers.
Net profit for the quarter ending June 30, 2024 reached AED 427 million ($116.3 million), lower than the AED 459 million posted a year earlier, the Dubai-listed airline reported on Monday.
Total turnover stood at AED 1.65 billion, up by 19% from the same period last year.
During the quarter, the airline logged 4.5 million passengers across its operating hubs, achieving a 19% increase from the 3.8 million travellers served in the same period last year.
Net earnings for the quarter remained “solid”, although the aviation sector continued to encounter some challenges, according to the airline’s statement.
“The solid net profit … was driven by robust passenger demand and revenue growth,” said Sheikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia.
“Despite the robust passenger demand, the aviation industry continued to experience slower yield growth and rising costs during the second quarter of this year, driven by economic and geopolitical uncertainties, currency fluctuations, fuel price volatility and supply chain disruptions that have led to increased inflationary pressures.”
For the first half of the year, net profit reached AED 693 million, dropping by 13% from a year ago’s AED 801 million.
Turnover for January to June amounted to AED 3.19 billion, up by 13% from the same period last year.
(Writing by Cleofe Maceda; editing by Seban Scaria)
