Air Arabia reports loss

DUBAI Air Arabia, the Middle East’s largest low-cost airline, announced, Thursday, its first-ever quarterly loss, blaming challenging market conditions and overcapacity.

The UAE carrier reported a net loss of 33 million dirhams (USD9 million) in the last three months of 2016, while revenue dropped 15% to 814 million dirhams.

Earnings of the Sharjah-based carrier “were impacted by (a) continuous drop in yield margins as a result of the overcapacity deployed in the market and the slow growth environment in major economic hubs,” said Air Arabia chairman Sheikh Abdullah al-Thani.

He warned that market conditions “continue to be challenging.”

It is the first quarterly loss on record for Air Arabia, according to Bloomberg News.

The airline’s shares tumbled 8.6% on Thursday on the Dubai stock exchange, the largest drop since March 2013, Bloomberg said.

Air Arabia’s annual profit dropped 4% to 509 million dirhams (USD138.7 million) in 2016, although passenger numbers increased 12% to 8.4 million.

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