Air Arabia posts Dh49.2m profit

Despite rising fuel costs, Air Arabia is on track to achieve a profitable 2012, its chief executive said Sunday as the airline posted an 11 per cent increase in its first-quarter net profit to Dh49.2 million, up from Dh44.2 million for the corresponding quarter in 2011. The Sharjah-based budget carrier said the jump was achieved on the back of a seven per cent increase in passengers to 1.23 million compared to 1.15 million it served in the same period last year. \"We have budgeted for a profitable year. And we are on track to achieve the same. \"However, there are three more quarters to go for the year and things are changing all the time,\" Adel Ali told Gulf News in a phone interview. He added that 25 per cent of Air Arabia\'s fuel is hedged for 2012 and that fuel accounts for over 40 per cent of the airline\'s overall costs. Asked if the airline would look to hedge again next year, Ali said: \"Fuel hedging forms a key part of our business, and we will look at it as the year goes.\" Adding to this, aviation analyst Saj Ahmad of StrategicAero Research said: \"While fuel costs will obviously weigh down on Air Arabia this year, it will be able to stave off any significant price hikes so as not to dent demand and avoid pushing it towards flydubai, as it receives new planes and expands network.\" The first quarter of this year saw Air Arabia posting a turnover of Dh621 million, a 21 per cent increase over Dh513 million in the same period of 2011, the carrier stated, adding that the average load factor stood at 82 per cent. Air Arabia will continue to enter new markets and new ventures this year, its Chairman, Shaikh Abdullah Bin Mohammad Al Thani, said in a statement. The carrier also said its operating fleet reached 30 aircraft, while it took delivery of the ninth of 44 A320 aircraft it has ordered from Airbus. It added that it expects to receive five more A320 aircraft this year, in line with its growth plan to further \"expand its destination network and significantly grow the size of its fleet by 2016\". Asked if Air Arabia planned to place new aircraft orders in the near future, Ali said: \"We will not be ordering more planes this year. \"It\'s not until 2015 that we will receive all of the ordered 44 planes.\" Air Arabia shares last traded on the Dubai bourse at Dh0.592, down 2.47 per cent.