Air Arabia reports AED 169 million first half 2020 net loss due to impact of COVID-19
Air Arabia (PJSC), the first and largest low-cost carrier (LCC) in the Middle East and North Africa, today revealed its financial and operational outcomes for the first half of this year ending June 30, 2020, as the global flight industry resumes to battle the influence of COVID-19.
Air Arabia recorded a net loss of AED 169 million for the first half finishing June 30, 2020, a direct consequence of second-quarter performance being massively influenced by COVID-19 and the following retirement of recorded flight operations.
The company’s turnover for the first six months of 2020 registered AED 1.021 billion, a decrease of 53 per cent opposed to AED 2.173 billion in the same period last year.
Air Arabia served a total of 2.48 million customers from all its four hubs in the first half of 2020, a drop of 57 per cent opposed to the first half of 2019.
The first half of 2020 results were mostly struck by the second quarter that saw the most severe impact of COVID-19 on airlines service.
The regular flight plan was influenced by airport closings and stopping of flights.
Operations throughout the second quarter relied on large on repatriation, charter, and cargo flights.
This ended in lower earnings for the second quarter reaching AED 120 million and consequently influencing the second quarter profitability to a net loss of AED 239 million.
Air Arabia took immediate measures to control the overall cost and improve cash position notwithstanding the challenges.
These include deferred cost and capital expenditure, workforce restructuring as well as cost rationalisation and performance, which all finished in reducing overall cost and maintaining liquidity.
Sheikh Abdullah Bin Mohamed Al Thani, Chairman of Air Arabia, said: “Air Arabia began the year 2020 with strong performance ensuring another year of growth and profitability.
However, the novel impact of COVID-19 left airlines worldwide battling the strongest challenge in its history”.
He added: “The full impact of COVID-19 on airline operations was fully developed in the second quarter as a consequence of border closures and flights delay across all key markets.
This experience has led airlines to focus on managing cost while maintaining global relief works with repatriation and aid flights”.
He continued: “Air Arabia’s strong business model enabled the administration team to act quick and take inevitable means to control cost and improve liquidity while performing a mix of commercial flights where possible.
These early measures have succeeded in saving cash and narrowing the net loss of the first half to tolerable levels, while still being able to prepare people during this intricate time and support repatriation efforts”.
He concluded: “The chances of the global aviation industry continue stable and will proceed to execute a vital role in the global economic recovery.
In July 2020, Air Arabia Abu Dhabi, the capital’s first low-cost carrier, started its operations from its headquarters at Abu Dhabi International Airport.
Air Arabia has also improved its consumer experience journey to cover all security measures that are in line with the most distinguished global safety measures.
The carrier base airports have also updated its entire foundation to ensure airport travel remains one of the safest while flying.