May 7 – Sharjah based Air Arabia posted a Dh50 million net profit in the first quarter of 2010, 51 percent less than the Dh 103 million profit for the same period last year, because of declining passenger yields. The drop in net profit occurred even as passenger numbers increased by 9.02 percent to 1.03 million, earning the carrier revenues of Dh482 million in the first quarter of 2010, 4 percent higher than the Dh 463 million earned for the same period last year. Air Arabia’s seat long factor was strong at 80 percent, allowing it to sustain its performance from the previous period.
“This decline in profitability was in line with global trends of the aviation industry’s performance represented by the increase in fuel costs as well as continuous pressure on yield margins” the airline said in a statement. The lingering effect of the global financial crisis and rising cost of fuel continues to impact the profitability of airlines around the world because of an ongoing dilution in yields versus market capacity, explained Adel Ali, board member and group chief executive officer.
