Gulf low-cost carrier (LCC) Air Arabia reported a first-quarter net profit of AED103 million ($28 million), down 10% compared to net profit of AED114 million in the 1Q 2016. Revenue for the quarter was AED810 million, down 14% year-over-year.

The airline said the results exceeded analysts’ expectations, but it had felt the effects of the global squeeze on yields. Nevertheless, the LCC had continued to enjoy strong passenger demand and had benefited from cost-control measures already in place.

Air Arabia carried more than 2.1 million passengers between January and March 2017, fractionally ahead of the record number of passengers carried in 1Q 2016. Load factor in 1Q 2017 was 81.2%, down 1.4 points from the year-ago quarter.

The LCC took delivery of one new Airbus A320 in the first quarter and operates a fleet of 47 A320s.

Air Arabia recorded strong first-quarter results despite the impact of lower yield margins that the industry continued to witness in the first quarter of this year, company chairman Sheikh Abdullah Bin Mohamed Al Thani said. “The strong measures that we took in driving cost margins lower while optimizing revenue opportunities have proven once again the resilient and dynamic business model that we operate. We continue to witness strong passenger demand … and we remain confident of the growth prospects of the low-cost travel segment in the region.

Looking forward, he added: “We believe the market economic and trading conditions are on an improving trajectory and we are optimistic that this will reflect positively on the industry’s performance for the rest of the year.”

Air Arabia added one new route from its main hub in Sharjah in 1Q 2017, to Baku in Azerbaijan. This was followed by the announcement of new seasonal flights from Sharjah to Trabzon, Turkey starting June 2017. In addition, Air Arabia added one new route from its operating hub in Morocco between Casablanca and Catania in Italy.

The airline also has operating hubs in Alexandria, Egypt; Amman, Jordan; and Ras Al Khaimah, UAE.

Alan Dron