Indian operations profitable, but yields have dropped: Air Arabia

The India operations of Air Arabia remain profitable, but yields have declined over the years, a top company official said today.

The Sharjah-headquartered airline flies 112 flights per week to 13 Indian cities at present and have been looking to expand further in one of the world's fastest growing aviation market but for bilateral constraints.

"For Air Arabia, all our routes in our network are profitable and India is one of them. India is profitable but, yes, there has been yield dilution year-on-year, which is due to the growing competition and also because of the market maturing up," Adel Ali, chief executive officer of Air Arabia said during a media interaction here yesterday evening.

However, according to him, India remains good in terms of profitability and the decline in yield year-on-year is also not bad.

Sounding optimistic about traffic growth prospects between India and the UAE, Ali said, "The demand for travel will always be there given the population size and the demography."

Air Arabia’s net profit for the full year ending December 31 surged 30 per cent to AED 662 million from AED 509 million in the year-ago period.

Besides, more than 8.5 million passengers flew with the no-frills airline last year, with an average seat factor of 79 per cent.

Ali said that Air Arabia was keen to add capacity in the Indian market but have not been able to do so as the Indian and the UAE governments are yet to take a call on the issue of increase in weekly seat allocation.

"We always want to add capacity. Our request for increasing the bilateral has been (pending) there for few years now with the government and whenever a decision is made, it will be good," he said.

The number of seats under the bilateral air service agreement between India and the UAE stands at 1.3 lakh per week. The seats are allocated between Dubai, Abu Dhabi, Sharjah and Ras-al Khaimah.

Of this, Dubai and Abu Dhabi together account for nearly 85 percent of the total traffic rights between India and the UAE.

According to Ali, Air Arabia always looks for opportunities globally to expand its business, but at present it does not have any specific plan to further invest in India.

"Being a public listed company, it is extremely important for us that we look at every investment opportunity.

(But) we don't have specific investment plan for India alone; we look around the globe or where ever we see the opportunity to invest," he said.