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 this up for the current quarter, but measures with cost control and a gradual resumption of services should bode well, chairman Abdullah Bin Mohamed Al Thani reported last week.
The full-year loss for 2020 was AED-192 million compared to the record AED1.008 billion profit in 2019. The operating loss was AED-180 million versus an AED932 million profit. Revenues were AED1.851 billion versus AED4.758 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 AED20 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 AED294 million revenues, while Q2 was the worst following the grounding of the fleet with a loss of AED-239 million on just AED120 million in revenues. The pre-Covid first quarter has been the best for Air Arabia, with an AED71 million profit, down from AED128 million the previous year. Revenues were AED901 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 Sharjah, Ras Al Khaimah, Cairo (Egypt), and Casablanca (Morocco).
Abu Dhabi set to provide additional growth
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.