Wednesday, February 1, 2017

Flydubai reports $8.6 million profit in 2016

Dubai-based low-cost carrier (LCC) flydubai posted a 2016 net income of AED31.6 million ($8.6 million) for 2016, down 69% from net income of AED100.7 million in 2015.

Full-year revenue for 2016 was AED5 billion, up 2.4% year-over-year (YOY).

The LCC did not release specific figures, but described a stronger second half, driven by increased passenger numbers. Flydubai said it was “impacted by downward pressure on yield, leading to lower overall revenue growth, reflecting a continuation of the same adverse factors reported in the first half.”

Flydubai chairman Ahmed bin Saeed Al Maktoum said the results “see flydubai report its fifth consecutive full-year of profitability.”

Flydubai carried 10.4 million passengers in 2016, up 14.4% YOY.

“Over the last two years, we have seen passenger traffic grow cumulatively by 52% in terms of RPKs. The continuation of mainly lower fuel prices and ongoing cost management efforts are reflected in the 16% improvement in terms of ASKs over the last two years. We have, however, seen a difficult pricing and operating environment,” flydubai CEO Ghaith Al Ghaith said.

Flydubai said in a statement that “fuel costs were 25% of operating costs compared to 30.6% in the previous year, against a backdrop of lower fuel prices for the year, with legacy fuel hedges impacting only 21% of the volume for full year 2016.”

Ancillary revenue—comprising baggage, cargo and inflight sales—contributed 13.8% of revenue, down from 15.1% in 2015.

In 2016, flydubai took delivery of eight Boeing 737-800s to support network expansion. The average age of the fleet was 3 years, 8.5 months. “During the course of the year, increased flight frequency on existing routes and a maturing in the performance of the 41 new routes launched in 2014 and 2015 saw ASKM grow by 9%,” flydubai said in a statement.

In October 2015, flydubai started operations at Al Maktoum International-Dubai World Central (DWC). Since then, the LCC has been operating from two gateways in Dubai and will continue to gradually increase its operations at DWC based on the further expansion of the airport, as well as create additional slots for Emirates Airline at the congested Dubai International Airport (DXB).

Flydubai said it continues to support the investigation of flydubai FZ981, a Boeing 737 that crashed on in Rostov-on-Don airport (Russia) on March 19, 2016, killing 55 passengers and seven crew members.

Looking to the year ahead, flydubai will be the first airline in the Middle East to receive Boeing 737 MAX 8 aircraft, which will begin to enter service in the 2H.

In a statement, flydubai said overall capacity “will not grow during 2017, as short-term capacity needs are adjusted, due to the ongoing challenging operating environment.” In line with the carrier’s fleet planning strategy to maintain a young fleet, the airline said it will “see the eight-year lease term expire for four next-generation 737-800s and during the year these aircraft will be retired from the fleet.”

Ghaith Al Ghaith said, “We will remain prudent throughout 2017... Yields will remain under pressure and we expect to report flat growth in the year ahead.” 

(Kurt Hofmann - ATWOnline News)

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