Air Arabia, the Mena region’s first and leading LCC, shall benefit from and exected shift by travelers from conventional to LCCs impacted by the global economic slowdown. Although the global airline industry is expected to come under pressure, we believe Middle East traffic will be less affected due to relatively strong economic fundamentals, favorable demographics and strong expansions by regional airlines and airports. We expect Air Arabia to post passenger traffic growth of 17% YoY in 2009 but a tamer increase in revenues of 9% YoY as we expect yields to fall on lower fares. Sustained revenue growth coupled with a substantial decline in fuel costs would allow for strong EBITDAR and net income growth of 46% and 21% YoY, respectively, in 2009. We expect a significant improvement in EBITDAR margins from 25.2% in 2008 to 33.6% in 2009.

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