Revenues decline 53% year on year
Air Arabia (PJSC), the first and largest low cost carrier (LCC) in the Middle East and North Africa, has announced its financial and operational results for the first half of this year ending June 30, 2020 as the global aviation industry continues to battle the impact of COVID-19.
Air Arabia registered a net loss of $46 million for the first half ending June 30, 2020, a direct result of second quarter performance being heavily impacted by COVID-19 and the subsequent cancellation of scheduled flight operations.
The company’s turnover for the first six months of 2020 registered $278 million, a drop of 53% compared to $743 million in the corresponding period last year.
Air Arabia served a total 2.48 million passengers from all its four hubs in the first half of 2020, a drop of 57% compared to first half of 2019.
The first half 2020 results were largely driven by the second quarter that witnessed the most severe impact of COVID-19 on airlines operation. Regular flight schedule was affected by airport closures and suspension of flights.
Operations during the second quarter relied by large on repatriation, charter, and cargo flights. This resulted in lower revenues for the second quarter reaching $33 million and consequently impacting the second quarter profitability to a net loss of $76 million.
Air Arabia took early measures to control overall cost and enhance cash position despite the challenges. These include deferred cost and capital expenditure, workforce restructuring as well as cost rationalisation and efficiency, which all resulted in reducing overall cost and preserving liquidity.
Sheikh Abdullah Bin Mohamed Al Thani, Chairman of Air Arabia, said: “Air Arabia started the year 2020 with strong performance promising another year of growth and profitability. However, the unprecedent impact of COVID-19 left airlines worldwide battling the strongest challenge in its history.
“The full impact of COVID-19 on airline operations was fully materialised in the second quarter as a result of border closures and flights suspension across all key markets. This fact has led airlines to focus on controlling cost while supporting global relief efforts with repatriation and aid flights.
“The prospects of the global aviation industry remain strong and will continue to play a vital role in the global economic recovery.
"While we started to see gradual opening of selective markets around the world, it is now clear that COVID-19 will continue to have a lasting impact on the aviation industry and the path to recovery is expected to be gradual."
As of today Air Arabia operates a mix of scheduled, repatriation, charter, and cargo flights across its operating hubs in the UAE, Morocco, and Egypt. In July 2020, Air Arabia Abu Dhabi, the capital’s first low cost carrier, launched its operations from its base at Abu Dhabi International Airport.