FlyDubai's Growth Strategy is Paying Off

Dubai-based budget carrier posts losses 39% lower than last year after increasing flight frequencies
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FlyDubai CEO, Ghaith Al Ghaith, expects even stronger performance in the second half of the year.
FlyDubai CEO, Ghaith Al Ghaith, expects even stronger performance in the second half of the year.

Flydubai announced half-year results for 2016 reporting revenue increases of 5.4 percent and a loss figure 39 percent lower than the same period last year.

The Dubai-based budget carrier has been pursuing a growth strategy involving increased flight frequences to existing destinations such as Bahrain, Baku, Belgrade, Bucharest, Muscat and Salalah in the first half of the year.

Passenger numbers have increased to 4.9 million an increase of 16.5 percent compared to the first six months of 2015. Business Class passengers per departure also saw an increase of 19 percent.

Total revenue from January to June in 2016 stood at AED 2,302 million (USD 627 million) a losses amounted to AED 89.9 million (USD 24.5 million).

Flydubai expects a stronger second half on the back on new aircraft deliveries, said CEO Ghaith Al Ghaith in a post earnings announcement. The carrier has issued three sale and leaseback agreements for a total of eight Next-Generation Boeing 737-800 aircraft. One aircraft joined the flydubai fleet in May and a second in June. Six aircraft deliveries planned during the second half of 2016 will allow 77 flights per week to be added to services from Dubai International to Almaty, Asmara, Astana, Bahrain, Bangkok, Bishkek, Bratislava, Colombo, Dar es Salaam, Entebbe, Erbil, Kiev, Male’, Moscow, Odessa, Prague, Tbilisi, Yerevan, Yekaterinburg and Zanzibar. Flights from DWC to Kathmandu will increase to 14 per week from 10 October.

“Flydubai’s network continues to mature offering our passengers enhanced connectivity as we meet the growing demand for travel in the region," he said. "Looking ahead to the second half of the year, we have started to receive the first deliveries from the order for 111 aircraft placed in 2013 with a total of 8 aircraft scheduled to join our fleet between May and December.”

Lower fuel costs, accounting for 23.5 percent of total operating costs, down from 30.6 percent last year, boosted revenues. But the carrier acknowledged challenges persist amid global economic headwinds.

“We have seen continued pressure on yields due to the uncertain international economic situation set against a backdrop of lower oil prices and adverse currency exchange rates," said Chief Financial Officer, Mukesh Sodani. We maintain a sharp focus on cost improvement while pursuing our broader goal of expanding our network and our service offering.”

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