Air Arabia Group reported its highest-ever profit, ending 2022 with a net profit of AED 1.222 billion. This outperforms 2019 when the airline produced an AED 1.008 billion net profit. It confirms that the carrier has solidly left behind the pandemic years. Air Arabia reports highest-ever profit.
Year on year, the net profit was up from AED 720 million. Total revenues reached AED 5.242 billion, up from AED 3.174 billion in 2021 as it carried 12.8 million passengers versus 6.8 million in the previous year at an eighty percent load factor. This includes operations at seven hubs in Sharjah, Abu Dhabi, Al Ain, Morocco, Egypt, Armenia, and Pakistan. Armenia saw the launch of subsidiary Fly Arna, while Fly Jinnah started in Pakistan. The airline expanded its network with 24 routes to over 190. Operating expenses were up to AED 3.810 billion from AED 2.291 billion, resulting in an operating profit of AED 1.432 billion compared to AED 882.9 million in 2021.
“Air Arabia’s 2022 record profitability is considered the best in the company’s operating history. The remarkable operational and financial performance reflect the carrier’s robust business model, its management team, as well as its discerning growth strategy”, Chairman Sheikh Abdullah Bin Mohammad Al Thani said in a media statement. His airline already reported a strong third-quarter result.
However, 2022 continued to be challenging, the Board of Directors says in the financial statements: “The aviation industry is still facing many geopolitical and economic challenges, such as the serious supply chain challenge. There is a noticeable scarcity in technical labor across the sector, shortage in spare parts, longer wait time for specialized maintenance, and even the unavailability of aircraft.” Air Arabia says it has been able to adapt to these challenges thanks to its operational flexibility across all its hubs.
In Q4, Air Arabia’s net profit was down on that of the previous years: AED 356 million compared to AED 467 million. Its explanation is that Q4 2021 produced higher yields and saw lower fuel prices. Revenues were higher at AED 1.393 billion versus AED 1.302 billion. Passengers carried were up to 2.3 million from 1.9 million in the December 2021 quarter. Al Thani referred to Q4 as a solid quarter, thanks to cost-controlling measures, strong yields, and high demand for value-driven products.
Air Arabia grew its fleet by ten to 68 aircraft after inducting three A321ceo’s (its first) and seven A320ceo’s. It didn’t receive any A321LRs, of which it has six. Of the fleet, 42 aircraft are based at its main hub in Sharjah in the UAE, eight in Abu Dhabi, nine in Morocco, four in Egypt, three in Pakistan, and two in Armenia. This year will be the last of modest fleet growth, as in 2024 the airline will induct the first op 120 A320neo-family aircraft that it ordered back in 2019.
After Armenia and Pakistan, the group is preparing the launch of Air Arabia Sudan together with DAL Group but it didn’t offer details about the exact date. For 2023, Al Thani is optimistic about the prospects: “While airlines continue navigating various challenges this year, we are confident of the fundamentals of the aviation sector and the underlying demand for affordable air travel. Air Arabia continues to drive its business by a clear strategy for growth and supported by its commitment to continuously maximize value offering to its customers and shareholders”.
Shareholders will be paid fifteen percent of the share capital in dividends, equivalent to fifteen fils per share.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.