Air Arabia deviates from dividend policy

Sharjah-based budget airline Air Arabia has deviated away from its dividend policy announced through its initial public offering (IPO) document two years ago.

The management has said that the dividend distribution will be not less than 25 per cent of the earnings, whereas the first dividend distribution from the 2008 earnings exceeded 90 per cent of the earnings at Dh509.727, the company made for the same period.

"We were very surprised by the board's decision to pay out 10 fils per share dividend in respect of 2008, equivalent to a 91.5 per cent payout ratio of the earnings per share," said Andrew Light and Hasnain Malik, the Citigroup analysts who prepared a report on Air Arabia.