Air Arabia's Nine-Month Profit Nearly Halves as Iran War Cuts Passenger Numbers

Revenue still rose 2% over the period, but the airline carried just over 14 million passengers across its hubs, 10% fewer than a year earlier. In the third quarter alone, net earnings fell 42% even though revenue rose 10% and passenger numbers slipped by a smaller 3%, AGBI reported from the statement.

The results give the clearest view yet of how the conflict is hitting the UAE's listed low-cost carrier. Air Arabia said the war has not materially affected its liquidity and that there is no significant threat to its ability to keep operating. Net cash flow from operating activities fell 20% year on year to AED1.6 billion ($436 million) between January and September, while cash and cash equivalents rose 89%.

The airline said it remains exposed to regional geopolitical developments, naming airspace access, route scheduling, passenger demand, fuel prices and wider economic conditions as the main channels of risk.

Air Arabia has kept expanding through the disruption. It launched 14 routes in the first nine months across its operating hubs in the UAE, Morocco, Egypt, Pakistan and Saudi Arabia, taking its network to 224 routes. It added 10 aircraft over the same period, bringing its fleet of owned and leased Airbus A320 and A321 jets to 100, and four more are due to arrive before the end of 2026.

Chairman Sheikh Abdullah bin Mohammad Al Thani said the multi-hub model gives the airline flexibility as market conditions change. "We will continue to invest in our fleet and expand our network where we see sustained demand," he said.

Investors have so far looked past the profit decline. Air Arabia's shares rose 0.6% to AED5.13 on the Dubai Financial Market on Thursday and are up more than 10% this year. State-owned Sharjah Asset Management holds 18.55% of the company.

The four aircraft scheduled for delivery before year-end will take the fleet to 104, which means the carrier will be adding capacity into a market where passenger demand has yet to recover.