UAE-based low-cost carrier Air Arabia aims to launch operations at its third hub in Egypt by mid-April and hopes to maintain its seat factor in the 80 percent range, its chief executive said on Wednesday.
The airline is facing growing competition from local rivals including Kuwait's Jazeera Airways and Dubai-owned flydubai, as well as from fully fledged carriers such as Emirates, struggling to cope with a sharp drop in international passenger travel.
Air Arabia already operates in Morocco, flying from its Casablanca hub earlier this year, and said in August it planned to set up a new hub between its base at Sharjah in the United Arab Emirates and North Africa to diversify its revenues and boost its catchment area.
"We are hoping to start the operation by the middle of April 2010," Group chief executive Adel Ali told an analyst call.
The operation, based near Alexandria, will start with two planes and intends to fly to Europe, Africa and the Middle East and could increase the number of planes to six by year-end.
Fourth-quarter net profit for the airline fell 15.2 percent, but beat most analysts' forecast.
Air Arabia carried 4.1 million passengers in 2009, up 14.2 percent from 3.6 million passengers last year, while the airline's seat load factor stood at 80 percent. Turnover in 2009 fell 4.5 percent to 2 billion dirhams, the firm said.
The airline is projecting a first quarter seat load factor of 80 percent, Ali said.
"I see no reason why we shoudn't," Ali said. "We had that in January."
Seat factor shows how successfully an airline fills its planes.
Ali said in October he did not see yields improving until the beginning of the first quarter of 2010.
The carrier hedged 35 percent of its fuel at about $60 and is in talks with banks and export credit agencies to finance aircraft orders. It has an order of 44 A320s from Airbus.
Air Arabia shares, up 3.26 percent this year, closed 1 percent lower on Wednesday.
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