Investors are bailing out of Air Arabia as concerns about higher oil prices were aggravated by Sunday’s announcement of weaker results than expected at the Middle East’s largest budget airline. The shares dipped to 84 fils each yesterday and are down more than 20 per cent in the past four months.
Air Arabia on Sunday announced a 44 per cent decline in profit for the second quarter, compared with the same quarter last year.
The company attributed the drop to higher oil prices, which account for 40 per cent of its operating costs, and pressure on passenger yields. Analysts said until passenger yields improved or oil prices fell, it would be difficult for airlines to post strong earnings.
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