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jets made by Canada’s Bombardier, though suggested a preliminary agreement by an airline Air Arabia now partly owns was no longer valid.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.

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.