Dubai: flydubai said on Monday it posted a full-year net profit of Dh222.8 million for 2013, up 47 per cent from 2012 on new routes and the launch of its business class services.
The budget carrier reaped revenue worth Dh3.7 billion on the back of launching 17 new routes during 2013 bringing the network to 66 destinations, it said in a statement.
Operating an average of 1,100 flights a week coupled with a continued demand resulted in an increase in passenger numbers to 6.82 million a 38 per cent increase over the previous year.
Fuel remained the wild card with expenses constituting the carrier’s single largest operating cost — 39.5 per cent of total cost. flydubai stated that 29 per cent of its total fuel requirements for 2014 have been hedged, following the hedging programme it adopted in the last quarter of 2013.
Ancillary revenue, meanwhile, accounted for 14.6 per cent of total revenues in 2013. It included in-flight entertainment, on board sales, seat preferences, checked baggage allowance, car rental, hotel bookings, travel insurance and visa facilitation services.
Calling 2013 a remarkable year for flydubai, Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of flydubai, said in a statement that flydubai remains focused on “playing a vital role in the UAE’s economic development and creating free flows of trade and tourism in previously underserved markets.”
New elements
Among other factors that helped the Dubai carrier performance last year was the launch of its business class seat configuration in October. By the end of December 2013, flydubai stated, its business class was available on 28 routes including Bucharest, Doha, Kabul, Male, Riyadh and Yekaterinburg.
“All over the world we are seeing the traditional low cost carrier model now changing. Even Ryanair, once a watchword for being service free starting to look at what is happening in its marketplace and needing to react. The installation of business class in flydubai is another example of that change and indeed, flydubai is at the very front of realising that the world was moving past ‘cheap and cheerful’ when it comes to travel. The world wants value,” said analyst Andrew Charlton of Aviation Advocacy.
Having strategically expanded its network within a five-hour flying radius of Dubai, flydubai has opened up 46 routes that were previously underserved or did not have direct air links to Dubai.
Another analyst, Saj Ahmad of StrategicAero Research, said that despite the regional turmoil in places like Syria and Egypt, there are a swathe of destinations that are underserved which the airline is starting new routes upon.
Fleet growth
flydubai placed the largest single-aisle Boeing aircraft order in the Middle East. At the 2013 Dubai Airshow, the carrier committed to ordering 75 Boeing 737 MAX 8s and 11 Next-Generation Boeing 737-800s, valued at $8.8 billion at list prices. Additionally, flydubai retains purchase rights for 25 more 737 MAXs.
“Adding more aircraft to our fleet this year will see us opening up many more new routes. And to have placed another order for more aircraft before we have received all the deliveries from our original order shows our appetite for further expansion and the continued demand for our flights,” Ghaith Al Ghaith, CEO of flydubai, said in a statement.
