Air Arabia passenger traffic falls 14% as regional conflict disrupts flight capacity.
SHARJAH: UAE budget airline Air Arabia reported a 51 per cent decline in net profit to Dh374 million in the first half of 2026, as regional conflict disrupted flights, reduced capacity and drove fuel prices to record highs.
The Sharjah-based low-cost carrier reported revenue of Dh3.48 billion for the six months ended June 30, a 1 per cent decline from Dh3.52 billion in the same period last year.
Air Arabia carried more than 8.7 million passengers across its operating hubs during the first half, down 14 per cent year-on-year. The airline attributed the decline to reduced operating capacity amid the ongoing regional conflict.
Despite the decline in passenger numbers, Air Arabia maintained an average seat load factor of 83 per cent, indicating that demand remained relatively resilient across its network.
The regional conflict, which began in February, disrupted operations through airspace closures, temporary restrictions and reduced flight capacity. The airline also faced record-high fuel prices during the period, adding further pressure on profitability.
The impact has been felt across the global aviation industry. Austrian Airlines reported an adjusted EBIT loss of €93 million in the first half of 2026, with the Middle East conflict increasing its fuel costs by more than €60 million from a year earlier.
Pegasus Airlines also swung to an operating loss in the second quarter, while Philippine Airlines posted a net loss of $25.1 million for the first half.
The broader pressure is reflected in forecasts from the International Air Transport Association (IATA), which expects Middle Eastern airlines to move from a combined profit of $7.2 billion in 2025 to a $4.3 billion loss in 2026.
Second-quarter profit plunges 77%
The impact was more pronounced in the second quarter, with Air Arabia’s net profit falling 77 per cent year-on-year to Dh96 million. Revenue declined 3 per cent to Dh1.68 billion.
The airline carried more than 3.9 million passengers during the quarter, down 23 per cent from the same period last year, while its average seat load factor stood at 81 per cent.
Air Arabia Chairman Sheikh Abdullah Bin Mohammad Al Thani said the airline’s ability to remain profitable despite the challenging operating environment demonstrated the resilience of its business model and financial position.
“The conflict significantly affected the aviation industry through multiple airspace closures, reduced operating capacity and higher operating costs, driven in part by record-high fuel prices,” he said.
He added that Air Arabia remained focused on maintaining network connectivity, adjusting its operations to changing conditions and managing costs while preserving operational efficiency.
Air Arabia adds six aircraft
Despite the challenging operating environment, Air Arabia expanded its fleet by six aircraft during the first half of the year, bringing its total fleet to 96 owned and leased Airbus A320 and A321 aircraft.
The carrier also launched five new routes across its operating hubs in the UAE, Morocco, Egypt and Pakistan.
Air Arabia said it remained confident in the strength of its business fundamentals as market conditions gradually improve.
Sheikh Abdullah said the airline’s robust business model, disciplined financial management and continued demand for its value-focused offering would support its growth strategy.
He added that Air Arabia remained committed to serving customers, expanding its network responsibly and creating sustainable long-term value for all stakeholders.
