Dubai
Low-cost carrier flydubai saw its net profit in 2016 dive 68 per cent following a difficult year that saw the crash in March of Flight 981, killing all 62 on-board.
Flydubai said in a statement on Wednesday that its net profit fell to Dh31.6 million in 2016, from Dh100.7 million in the previous year. This is despite posting a 2.4 per cent increase in total revenue — from Dh4.9 billion in 2015 to Dh5 billion in 2016,
Passenger numbers, meanwhile, grew to a “record level” of 10.4 million travellers in 2016, the carrier stated, marking 14.4 per cent growth over the previous year.
Striking an upbeat tone, Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation, Chairman and Chief Executive of Emirates airline and Group and Chairman of flydubai, said in a statement: “These results see flydubai report its fifth consecutive full-year of profitability. In 2012, our third year of operation, we carried 5.1 million passengers. This year, we have carried 10.4 million passengers demonstrating that flydubai continues to help change the way both business and leisure passengers travel around the region.”
Last year’s poor performance follows 2015’s drop in annual profits of 60 per cent over 2014, as a result of lower demand from Russia, a stronger dollar, and the cancellation of routes to several destinations for security reasons.
The story remained the same last year, with the statement referencing adverse factors such as the downward pressure on yield, which led to lower overall revenue growth in the first half of year.
The airline also made reference to flydubai Flight 981, which crashed in Rostov-on-Don, Russia, in March of last year. Flydubai said it was providing financial assistance to the affected families.
The outlook for 2017 was gloomy, with Gaith Al Gaith, CEO of flydubai, saying in a statement that he expects the airline “to continue to operate in a challenging socioeconomic environment. Yields will remain under pressure and we expect to report flat growth in the year ahead.”
Fuel costs improved from 30.6 per cent of operating costs to 25 per cent last year, driven down by low fuel prices, whilst 2016 saw the airline add eight Boeing 737-800 aircraft to its fleet.
Flydubai will receive the new model Boeing 737 MAX 8 in 2017, the first airline in the Middle East to do so, expected to enter into service in the second half of the year.
Despite this, the statement notes that capacity will not grow during 2017, with several Boeing 737-800s being retired from the fleet, whilst “short term capacity needs are adjusted, due to the ongoing challenging operating environment.”
