Market conditions and investments exerted downward pressure to profits compared with 2014
- Lower oil prices and political instability hit Air Arabias fiscal performance
- Key investment includes stakes acquisition of Jordans Petra Air
- Correction in fiscal performance expected in coming quarters
Sharjah-headquartered Air Arabia posted $64m in net profit during the first six months of 2015.
This figure is 4 per cent lower than the net profit recorded a year earlier, in spite of the number of passengers flown by the airline rising by 9 per cent compared with the corresponding period last year.
The low-cost carrier attributed its weaker performance this year to pressured yield margins resulting from tough market conditions and strategic investments made during the year.
A key part of these investments is the firms acquisition of a 49 per cent stake in Jordans Petra Air, which has since been rebranded as Air Arabia Jordan.
Air Arabia chairman Abdullah bin Mohammad al-Thani said in a statement that the economic performance from Russia and Commonwealth of Independent States 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, he said.
On the upside, the airlines seat load factor during the first half of the year is at 79 per cent. Seat load factor is the number of passengers carried as a percentage of available seats.
The carrier reported a double-digit profit rise during the first quarter of the year.
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