Air Arabia eyes 100-jet order this year after record 2017 profit

Updated 07 March 2018

Air Arabia eyes 100-jet order this year after record 2017 profit

BENGALURU: Middle East budget carrier Air Arabia will add more destinations and could order around 100 narrow-body aircraft this year, thanks to rising demand in Egypt and other hubs, Chief Executive Adel Ali said on Wednesday.
The expansion from the United Arab Emirates’ only publicly listed airline comes amid rising oil prices and after a year in which Air Arabia’s profit increased 30 percent to a record 662 million dirhams ($180 million), as it flew more passengers and operated more routes.
The airline is considering placing new orders for the first time in several years to support future growth.
“It doesn’t necessarily have to be a purchase order. The leasing market is pretty good,” Ali said in an interview in the southern Indian city of Bengaluru.
In November, Air Arabia announced a leasing agreement for six Airbus A321neo long-range jets from US-based Air Lease Corp.
“Our technical team and financial team are working with both Boeing and Airbus,” Ali said.
The Sharjah-headquartered airline currently operates an all-Airbus A320 narrow-body fleet of around 50 jets.
Ali did not rule out a deal for CSeries jets made by Canada’s Bombardier, though suggested a preliminary agreement by an airline Air Arabia now partly owns was no longer valid.
Petra Airlines, in which Air Arabia bought a 49 percent stake three years ago, signed a letter of intent with Bombardier in 2014 to buy up to four CSeries jets in a deal worth up to $300 million at list prices.
“Petra as an airline was finished a long time ago. That’s history. Everything that was there is gone,” he said.
Petra was rebranded Air Arabia Jordan in 2015 with the opening of Air Arabia’s fourth hub in Amman.
Ali said Air Arabia would sharpen its focus on Egypt this year as demand increases.
“We see the tourists coming back, trade is coming back. We have slowed down in Egypt for some time now because of geopolitical and economic uncertainties. We now see certainty there,” he added.
The carrier also expects to grow in Russia and some former Soviet states this year. The 2018 FIFA World Cup will be held in Russia, which is expected to spur demand.
Air Arabia plans to add more routes in India, Ali said. The airline already operates a handful of routes in the country, a booming aviation market.


Oil up after drone attack on Saudi field, but OPEC report caps gains

Updated 55 min 54 sec ago

Oil up after drone attack on Saudi field, but OPEC report caps gains

LONDON: Crude oil prices rose on Monday following a weekend attack on a Saudi oil facility by Yemen’s Houthi militia and as traders looked for signs of progress in US-China trade negotiations.
Price gains were, however, capped to some degree by an unusually downbeat OPEC report that stoked concerns about growth in oil demand.
Brent crude, the international benchmark for oil prices, was up 85 cents, or about 1.4%, at $59.49 a barrel at 1225 GMT.
US West Texas Intermediate (WTI) crude futures were up $1.01, or 1.8%, at $55.88 a barrel.
A drone attack by the Iran-backed Houthi militia on an oilfield in eastern Saudi Arabia on Saturday caused a fire at a gas plant, adding to Middle East tensions, but state-run Saudi Aramco said oil production was not affected.
“The oil market seems to be pricing in again a geopolitical risk premium following the weekend drone attacks on Saudi Arabia, but the premium might not sustain if it does not result in any supply disruptions,” said Giovanni Staunovo, oil analyst for UBS.
Iran-related tensions appeared to ease after Gibraltar released an Iranian tanker it seized in July, though Tehran warned the United States against any new attempt to seize the tanker in open seas.
Concerns about a recession also limited crude price gains.
Meanwhile, China’s announcement of key interest rate reforms over the weekend has fueled expectations of an imminent reduction in corporate borrowing costs in the struggling economy, boosting share prices on Monday.
US energy firms this week increased the number of oil rigs operating for the first time in seven weeks despite plans by most producers to cut spending on new drilling this year.
“WTI in recent weeks has performed relatively better than Brent... Pipeline start ups in the United States have been supportive for WTI, while the ongoing trade war has had more of an impact on Brent,” said Warren Patterson, head of commodities strategy at Dutch bank ING.
The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth in 2019 by 40,000 barrels per day (bpd) to 1.10 million bpd and indicated the market would be in slight surplus in 2020.
It is rare for OPEC to give a bearish forward view on the market outlook.
“Such a bearish prognosis will heap more pressure on OPEC to take further measures to support the market,” said Stephen Brennock of oil broker PVM.