The Middle East’s leading low-cost carrier posts solid yearly profit

Air Arabia PJSC’s full-year profit increased 55 percent as more passengers used the Middle East’s biggest discount airline for travel.

Net income climbed to 425 million dirhams ($116 million) from 274 million dirhams a year earlier, the Sharjah, United Arab Emirates-based airline said in an e-mailed statement today, without specifying if the figures included minority interests. The average estimate of eight analysts was for a profit of 404 million dirhams, according to data compiled by Bloomberg.

“Air Arabia continued to demonstrate its concerted efforts to enter into new markets and launch new ventures,” Chairman Sheikh Abdullah Bin Mohammad Al Thani said in the statement. “The year 2012 saw Air Arabia expand its global network by entering new markets and taking more aircraft deliveries.”

Air Arabia, which competes with state-owned FlyDubai, is adding aircraft to its bases in Morocco and Egypt to capture a rebound in demand for travel following last year’s so-called Arab Spring, Chief Executive Officer Adel Ali said in March. The airline halted plans to establish a hub in Jordan in 2011 amid concern about uprisings in the Middle East and North Africa.

The airline carried more than 5.3 million passengers last year compared with 4.7 million a year earlier, with an 82 percent seat-load factor, or passengers carried as a percentage of available seats. Fourth-quarter profit rose 6 percent to 83 million dirhams, while sales climbed 18 percent to 755 million dirhams.

The carrier, which now operates flights to 82 destinations from three regional hubs, started nine destinations last year from its primary hub in Sharjah, the company said. Air Arabia took delivery of six new A320 aircraft from Airbus SAS in 2012 as part of an order for 44 aircraft placed in 2007.

The company plans to pay a dividend of 7 fils a share for last year. The stock climbed 42 percent in 2012 compared with a 20 percent increase for the benchmark Dubai Financial Market General Index.

Editors: Shaji Mathew, Thomas Mulier. To contact the reporter on this story: Glen Carey in Riyadh at [email protected]. To contact the editor responsible for this story: Shaji Mathew at [email protected]