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Air Arabia PJSC expects Egypt and Morocco to drive growth this year after the low-cost carrier posted its biggest profit on record.
The shares rose as much as 2.3 percent in Dubai and were headed for their highest close in a year. The airline’s full-year profit attributable to owners of the company rose 29 percent to 631 million dirhams ($172 million), helping it raise dividend to 10 fils a share from 7 fils a year ago.
This year the “good spots for us would be Morocco, which is going from strength to strength, and we’re putting more capacity on those lines,” Chief Executive Officer Adel Abdullah Ali told Bloomberg TV in an interview. “Egypt is another one where we’ve grown a 100% year-on-year and we may grow more this year, particularly with tourism getting back to the Red Sea.”
Air Arabia, which operates a fleet of 50 Airbus A320 aircraft, has bounced back after overcapacity and lower yields hurt airlines in the Middle East in the past years. Passenger traffic growth in the Middle East slowed to 6.6 percent in 2017, according to the International Air Transport Association, making it the only region to have witnessed an annual slowdown last year.
Growth of 7 percent in passenger numbers this year “is easily achievable,” Ali said.
Air Arabia said the average seat load factor, or passengers carried as a percentage of available seats, in 2017 remained at 79 percent, while it carried more than 8.5 million passengers compared with 8.4 million year ago.
The airline continues to pin hopes on expanding operations in the Jordanian capital but it isn’t prepared to keep spending on them if there is no breakthrough in an impasse with the government over air traffic rights, Ali said.
Air Arabia currently operates in Amman as a charter airline with one plane, having put plans to establish a hub there on the back burner after it was barred from deploying more than one flight.
(Updates with shares in fifth paragraph.)
©2018 Bloomberg L.P.
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