Dubai: Budget airline flydubai will receive fresh government funding of Dh280 million, raising its capital to Dh500 million following a decree by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
"The full amount is to be paid by the Dubai Government, according to Law No 13 of 2010, issued by Shaikh Mohammad," the news agency WAM reported yesterday.
Flydubai's capital had been set earlier by law at Dh220 million, fully paid by the Dubai Government. The new law has more than doubled the company's capital.
Chief executive Gaith Al Gaith said the increased capital would go towards the airline's expansion, without giving any specifics.
"We will ensure flydubai continues to expand in line with our stated objectives and we will do our best to ensure the success of our first year continues," he said in a statement.
During 2008's Farnborough Air Show, flydubai signed a $4-billion (Dh14.71 billion) order with Boeing for 50 B737-800 aircraft. Later this month it will take delivery of its ninth aircraft, and the rest will be received by 2015. By the end of next year, it will operate 13 Boeing 737-800 jets.
With ongoing financing needs, the additional capital may be used to boost the company's leveraging capabilities in the debt markets as well.
The airline completed its first year of operations on June 1, during which it flew more than 750,000 passengers and covered 16 destinations.
"The real plan is that we want to grow from now until 2015 with 50 aircraft and cover the region within a 4.5-hour radius.
"We want to make travel from the UAE to the region faster and easier. We will continue to challenge ourselves," Al Gaith said.
Plans for the rest of the year include expanding the network to 40 destinations.
The carrier recently began a service to Sri Lanka and entered the Indian market with flights to Luck-now after a year-long wait.
Sharjah Air Arabia, the first low-cost carrier in the Middle East and North Africa, signed a joint venture agreement yesterday with Amman-based Tantash Group to launch Jordan's first budget airline.
Air Arabia Jordan will provide direct services to destinations across Europe, Middle East and North Africa from Queen Alia International Airport, a statement said. The announcement follows the recent launch of operations of Air Arabia's fourth hub in Alexandria.
"At a time when the global and regional economy continues to demonstrate strong signs of sustained recovery, we are confident of the long-term growth opportunities for the first low-cost carrier in the Kingdom," said Adel Ali, Group Chief Executive Officer of Air Arabia.
