Shares in Air Arabia yesterday soared to the highest level since April after the budget airline based in Sharjah posted better than expected profits and a big rise in passenger numbers for the three months to the end of June.
Second-quarter net profit rose 31 per cent to Dh65 million (US$17.6m) for the period from Dh49.6m a year ago. That beat a Reuters poll of analysts' predictions, which forecast profits being between Dh51m and Dh52.5m.
Revenues rose to Dh729.6m from Dh592.2m in the second quarter last year and the average seat load factor - a measure of capacity utilisation - stood at 85 per cent, up 3 per cent over the same time last year.
The carrier also reported it handled 1.3 million passengers in the quarter, up 15 per cent over the same period last year.
The shares climbed 0.8 per cent to 65.1 fils at the close in Dubai yesterday, the highest level since April 17. The stock has climbed 11 per cent so far this year. Air Arabia was the fourth-biggest gainer and the most traded stock on the benchmark Dubai Financial Market General Index.
"In the second quarter of this year, our proven ability to identify and capitalise on underserved routes continued to reap enormous benefits," said the airline's chairman, Sheikh Abdullah bin Mohammad Al Thani.
Yesterday's posting takes Air Arabia's first-half net profits to Dh115m, an increase of 22 per cent, compared with Dh94m in the corresponding period last year.
The carrier's turnover for the first half of this year stood at Dh1.3 billion, an increase of 22 per cent compared with Dh1.1bn reported in the same period last year. The airline carried 2.5 million passengers in the first half of this year, an increase of 11 per cent over the same period last year.
Air Arabia said it intended to continue to add "three to four new points" to its flight network per year.
New routes to Taif in Saudi Arabia and Salalah in Oman in the first half of this year and increased flights to cities in India and Kuwait took its total number of destinations to 75.
The airline also said it was considering launching new routes into Russia and more former Soviet Union states.
Air Arabia currently serves Moscow, the Ukrainian cities of Kiev and Donetsk, and Almaty in Kazakhstan.
It also operates from two smaller hubs in Morocco and the Egyptian coastal city of Alexandria.