Low-cost airline Air Arabia has turned the corner on a very difficult 2020 by reporting a small but significant profit of AED 20 million for its final quarter. It remains to be seen if the carrier can keep up this way in the current quarter, but its measures with cost control and a gradual resumption of services should bode well, chairman Abdullah Bin Mohamed Al Thani reported last week. Air Arabia reports a small Q1 profit.
The full-year loss for 2020 was AED -192 million compared to the record AED 1.008 billion in 2019. The operating loss was AED -180 million versus an AED 932 million profit. Revenues were AED 1.851 billion versus AED 4.758 billion the previous year. The airline carried 4.3 million passengers almost a third of the 12.1 million welcomed onboard the year before.
Looking by quarter, Q4 ended at an AED 20 million profit, albeit ninety percent down on the same period in 2019. Revenues were 536 million, -53 percent. Q3 had ended at a loss of AED -44 million and AED 294 million revenues, while Q2 was the worst following the grounding of the fleet with a loss of AED -239 million on just AED 120 million in revenues. The pre-Covid first quarter has been the best for Air Arabia, with an AED 71 million profit, down from AED 128 million the previous year. Revenues were AED 901 million. Al Thani said his airline is looking at further measures to improve its fixed and flexible cost structure and enhance its cash position.
Air Arabia currently operates at 45 percent capacity around its network and will gradually ramp up capacity again “where possible.” Despite the crisis, fourteen new routes were opened last year from its UAE hubs in Abu Dhabi, Sharjah, Ras Al Khaimah, Cairo (Egypt), and Casablanca (Morocco). A major contribution to growth will come this year from Air Arabia Abu Dhabi, which launched operations last July with the first service to Alexandria that was followed by another eight routes into Egypt, Afghanistan, India, and Oman. For the moment, the joint-venture airline between Air Arabia and Etihad is focusing on different markets from its new rival Wizz Air Abu Dhabi. This is about to change once Wizz Air expands its network to cover the Indian subcontinent as well.
Air Arabia ended the year with a fleet of 57 aircraft, 52 Airbus A320neo’s, and five A321LRs, the latter sourced from Air Lease Corporation (ALC) with one more to join from this lessor. The carrier still has 120 in backlog since placing an order at the 2019 Dubai Airshow for 73 A320neo’s, 27 A321neo’s, and 20 A321XLRs. At the time, CEO Adel Al Ali said deliveries were from 2024 and the airline hasn’t reported any changes on this schedule.