Dubai – Mubasher: MubasherTrade maintained the price target (PT) of Air Arabia at AED 1.80, while keeping its “Buy” recommendation.
The airline reported a 4% year-on-year decline in earnings to AED 490.4 million, missing MubasherTrade estimates (MTRe) of AED 596.0 million by 18%.
Average passenger yield dropped 11% year-on-year to AED 450, matching MTRe of AED 464.
On the other hand, staff cost rose 10% year-on-year, probably on the back of larger fleet size as the company received seven new aircrafts during the year.
The airline managed to derive business growth despite challenging market conditions, focusing on increasing routes and capacity.
In November 2016, Air Arabia said that it will buy five additional Airbus A320 aircraft.
The research firm believes the airline's expansion strategy is being well managed, raising potentials for success.
