Dubai: Low-cost carrier Flydubai reported Dh142.5 million in losses for the first half of 2017 on Monday, with the figure widening from the Dh89.9 million in losses reported in the same half of 2016.
The airline attributed losses to higher fuel costs and pressure on yields.
The losses came despite a 9.9 per cent year-on-year rise in revenues, which reached Dh2.5 billion in the first half as an increase in passenger numbers gave a boost to revenues. Passenger numbers reached 5.4 million, up 10.5 per cent year-on-year.
“The demand for travel on flydubai remains strong, and the airline has seen its overall market share grow. These factors have, however, been offset by the price performance determined by the market,” the airline said in a statement.
Flydubai added, “The airline also faced comparatively higher fuel expenses during the reporting period, with fuel costs accounting for 24.8 per cent of operating costs compared to 23.5 per cent in the previous reporting period.”
The losses at flydubai come as regional airlines face pressures because of slower demand, stronger competition, and political factors. In May, Emirates airline reported an 82 per cent plunge in its profits year-on-year reaching as the carrier cited “a turbulent year for aviation and travel.”
Meanwhile, Abu Dhabi’s Etihad Airways in July reported $1.87 billion (Dh6.87 billion) in net losses for 2016.
Gaith Al Gaith, chief executive officer of flydubai, said the airline will “continue to manage our cost performance, and balance this with our long-term view of the potential for air travel in the region.”
In its statement, flydubai said it will continue to focus efforts on three main areas; improving cost performance, broadening its distribution, and optimizing its network.
The airline’s closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, remained at Dh2.1 billion.
From an operational perspective, flydubai took delivery of the last of the next-generation Boeing 737-800 aircraft, receiving one aircraft in February and another in April. The airline said it is set to receive six new aircraft by December 2017.
In July, flydubai and Emirates announced a partnership deal that will allow them to join forces to growth their operations and offer passengers access to both networks. Analysts said the deal will strengthen the position of both airlines and cater to more passengers.
Flydubai said at the time the partnership will be rolled out over the coming months, and includes code-sharing, network collaboration, and coordinated scheduling. Flydubai did not disclose further details on that partnership when it announced its financial performance on Monday.
