A flynas Airbus A320neo. Fuel costs rose 51% in the third quarter. (flynas)
Saudi Arabia's budget airline earned less than a quarter of what it made a year earlier in the third quarter, as the war in the region kept jet fuel expensive.
Flynas made a net profit of 27 million Riyal ($7.2 million) in the three months to September, down 77.5% from $32.1 million a year earlier, the company said in a filing on Wednesday.
It's still a turnaround. In the second quarter, the airline lost $64.2 million.
A window into the industry: flynas is the only Saudi airline listed on the stock market, so its numbers are the clearest look outsiders get at how the war is hitting air travel in the Kingdom.
The picture isn't pretty. Airline caterer Catrion said this week its third-quarter profit fell 56%, as fewer flights meant fewer meals served.
Fuel ate the gains: fuel was flynas's biggest cost at $177.6 million, up 51% from a year earlier. Jet fuel prices have stayed high since the regional conflict began in March.
That pushed the total cost of running flights up 11% to about $507 million.
Fares helped: revenue rose 6% to $592 million, as the airline earned more per seat. Its core low-cost business grew 9% to $578.7 million.
Hajj timing hurt: revenue from its Hajj flights fell 67% to $5.1 million. This year's season ended in the second quarter, while last year's ran into the third.
Last year's quarter also included an $8.8 million one-off gain from selling planes and leasing them back.
Nine months in: profit for the year so far fell 83.9% to $25.5 million.
The conflict "led to higher fuel prices and pressure on demand," the company said. That outweighed the gains from higher revenue per seat.
The worst may still be ahead: these numbers stop at the end of September. They don't include October, when Riyadh's King Khalid International Airport closed for several days and nearly half of all scheduled departures across the Kingdom were cancelled in a single week.
On Oct. 15 alone, 81% of Riyadh departures were scrapped, and card spending on airlines dropped almost 30% in a week. That hit will land in flynas's fourth-quarter results.
Why it matters: higher fares are no longer enough to cover the fuel bill. And with October's shutdown yet to show up in the numbers, the fourth quarter looks set to add even more pressure.
What to watch: fuel prices, how fast flights return to normal, and whether demand recovers through the winter travel season.
For more on how the war is hitting the businesses behind Saudi air travel, read Airline Caterer Catrion's Profit Halves as War Grounds Flights.
