UAE budget airliner Air Arabia achieved record profits in 2019, crossing the AED 1 billion mark for the first time in its short history.
Total net profits were just over AED 1 billion ($272 million) for the full-year ending 31 December 2019, a 90% increase compared to 2018, excluding one-off impairments the company booked on investments.
Full-year revenues also increased by 15% to reach AED 4.75 billion ($1.29 billion), attributed to strong passenger demand, despite the lower average for demand in the Middle East region.
Air Arabia carried 12 million passengers last year from its four hubs in the UAE, Morocco and Egypt, 10% more compared to 2018. Load factor for the full year increased 2% to 83%.
In 2019 Air Arabia received three new A321neos, bringing its total fleet size to 55 aircraft. At the Dubai Airshow, it signed an order worth $14 billion for 120 A320 aircraft.
The firm also signed an agreement with Etihad Aviation Group to launch Air Arabia Abu Dhabi, a new low-cost carrier, which is set to start operating in the second quarter of this year.
Sheikh Abdullah Bin Mohammad Al Thani, chairman of Air Arabia, said that 2019 has been a “challenging year” for the global aviation industry.
“The global economy endured a slowdown in key international markets while escalating geo-political pressures continued to impact the trading environment,” he said.
“Despite all that, we are proud that Air Arabia managed to deliver a track record year in its young history and to cross, for the first time, the AED 1 billion mark in profitability.”
He added: “Our focus on expanding into new markets combined with improved operational efficiencies has led to another year of sustained growth and profitability for the airline.
“The strong performance in 2019 is a testament to the strength of the business model we operate and the carrier’s management team”.
In the fourth quarter, Air Arabia reported a net profit of AED 199 million while turnover reached AED 1.14 billion.
As well as lower fuel prices, Air Arabia’s results were supported by higher customer demand, stronger yield margins, higher fleet utilisation and cost control measures.
Al Thani added: “While Air Arabia managed to register record fourth quarter and full year 2019 performance; going forward, we remain focused on driving operational efficiency across board, exploring opportunities and ventures that will best serve the airline’s ambitious growth plans while delivering optimum value to our customers and shareholders”.