After several years of shrinking margins in the Gulf region, an improvement in yield margins helped LCC Air Arabia to post profits of AED110 ($30 million) for 1Q 2018, up 8% compared to AED102 million for the year-ago quarter.

The Sharjah-based carrier’s turnover for the period also rose 8%, to AED877 million, compared to AED810 million last time.

Load factor was static at 80% compared to a year ago; the company’s fleet grew to 51 Airbus A320s, with three more scheduled to arrive in the current quarter. Two will be deployed to the carrier’s main Sharjah hub, while the third will be based at Alexandria, Egypt.

Air Arabia said the long-term outlook for aviation in the Gulf region remains solid, with continuing sustainable growth being driven by a combination of underlying demand for air travel, major investments in the region’s infrastructure, and its strategic position connecting Europe, Africa and Asia.

However, airlines in the region “continue to face economic and political challenges, which make the operating environment costly and unpredictable,” the carrier said in a statement.

The 1Q improvement in yield margins is a positive indicator, Air Arabia said. “We believe that airlines, more than ever, are now driven to focus on cost control measures … to drive cost baseline [sic] lower.” They face a variety of external challenges, including rising airport charges, fuel price volatility, currency fluctuations, plus the region’s geopolitical tensions, the airline added.

Alan Dron alandron@adepteditorial.com