Air Arabia PJSC

Air Arabia maintains a strong liquidity position with AED 4.21 billion in cash and equivalents, supporting a current ratio of 1.33 and a debt-to-equity ratio of 0.31. The company's liquidity is further reinforced by a free cash flow of AED 523.29 million, indicating robust cash generation despite capital expenditures of AED 506.73 million.

Profitability metrics show a return on equity of 5.39% and a return on assets of 2.65%, which are below the industry median for airlines, suggesting room for improvement in asset utilization and capital efficiency. The company's operating margin of 20.95% (calculated from operating income of AED 346.95 million on revenue of AED 1.66 billion) is in line with the low-cost carrier model but lags behind high-margin peers.

Geographically, Air Arabia's revenue is concentrated in the Middle East, with disclosed operations in the UAE and regional expansion into South Asia and Africa. The company's segmental breakdown is not publicly detailed, but its fleet of 15 Airbus A320 aircraft supports a regional focus.

The company's growth trajectory is modest, with no significant revenue acceleration in the current fiscal year. Analysts project a mean price target of AED 4.94, suggesting limited upside in the near term. The company's capital expenditures and fleet expansion plans are not disclosed in detail, but the low-cost model implies disciplined spending.

Risk factors include exposure to fuel price volatility and geopolitical tensions in the Middle East, which could disrupt operations and demand. The company's liquidity risk is low, and no immediate dilution pressures are identified, with shares outstanding remaining stable at 4.67 billion.

Recent filings and transcripts do not highlight material events, but the company's 2023 annual report notes ongoing fleet modernization and route optimization initiatives to improve efficiency.

Air Arabia's 25.2% revenue CAGR significantly outpaces industry peers, demonstrating strong top-line growth momentum over the four-year period.

Air Arabia maintains a conservative debt-to-equity ratio of 0.31, which is above the median safety threshold of the airline cohort.

Nine analysts rate Air Arabia a buy, with a mean price target implying 1.8% upside from the current market price.

Capital expenditure intensity reached -30.6% of revenue, placing Air Arabia in the bottom quartile of the airline cohort.

Return on equity of 5.39% falls below the airline cohort median of 9.37%, indicating weaker capital efficiency than peers.

Long-term debt increased to 2.78 billion AED in FY2026, reversing the previous trend of debt reduction seen in prior years.

Net income growth slowed to 11.0% year-over-year in FY2026, decelerating from the robust 22.6% four-year CAGR.

Revenue AED 1.80B, +2,6% YoY; Operating income −31,9% YoY.

• ▍Revenue AED 1.80B, +2,6% YoY
• ▍Operating income −31,9% YoY
• ▍Net income −18,7% YoY
• ▍Free cash flow +589,0% YoY
• ▍Net margin 13.8%

Revenue AED 2.30B, +28,9% YoY; Operating income +8,2% YoY.

• ▍Revenue AED 2.30B, +28,9% YoY
• ▍Operating income +8,2% YoY
• ▍Net income +25,8% YoY
• ▍Free cash flow −302,4% YoY
• ▍Net margin 17.0%

Revenue AED 2.04B, +14,4% YoY; Operating income +22,8% YoY.

• ▍Revenue AED 2.04B, +14,4% YoY
• ▍Operating income +22,8% YoY
• ▍Net income +10,9% YoY
• ▍Free cash flow −45,5% YoY
• ▍Net margin 28.5%

Revenue AED 1.69B, +2,2% YoY; Operating income −18,0% YoY.

• ▍Revenue AED 1.69B, +2,2% YoY
• ▍Operating income −18,0% YoY
• ▍Net income −10,3% YoY
• ▍Free cash flow −25,4% YoY
• ▍Net margin 20.7%

Revenue AED 1.76B; Operating income AED 267.1M.

• ▍Revenue AED 1.76B
• ▍Operating income AED 267.1M
• ▍Net margin 17.4%

Revenue AED 1.78B; Operating income AED 257.4M.

• ▍Revenue AED 1.78B
• ▍Operating income AED 257.4M
• ▍Net margin 17.4%

Revenue AED 1.79B; Operating income AED 357.7M.

• ▍Revenue AED 1.79B
• ▍Operating income AED 357.7M
• ▍Net margin 29.4%

Revenue AED 1.66B; Operating income AED 346.9M.

• ▍Revenue AED 1.66B
• ▍Operating income AED 346.9M
• ▍Net margin 23.5%

Revenue AED 7.79B, +15,1% YoY; Operating income +7,2% YoY.

• ▍Revenue AED 7.79B, +15,1% YoY
• ▍Operating income +7,2% YoY
• ▍Net income +11,0% YoY
• ▍Free cash flow −308,9% YoY
• ▍Net margin 20.9%

Revenue AED 6.77B, +12,8% YoY; Operating income −4,4% YoY.

• ▍Revenue AED 6.77B, +12,8% YoY
• ▍Operating income −4,4% YoY
• ▍Net income −5,2% YoY
• ▍Free cash flow −46,2% YoY
• ▍Net margin 21.7%

Revenue AED 6.00B, +14,5% YoY; Operating income +9,6% YoY.

• ▍Revenue AED 6.00B, +14,5% YoY
• ▍Operating income +9,6% YoY
• ▍Net income +26,6% YoY
• ▍Free cash flow −7,2% YoY
• ▍Net margin 25.8%

Revenue AED 5.24B, +65,1% YoY; Operating income +75,7% YoY.

• ▍Revenue AED 5.24B, +65,1% YoY
• ▍Operating income +75,7% YoY
• ▍Net income +69,7% YoY
• ▍Free cash flow −6,6% YoY
• ▍Net margin 23.3%