Dubai: Flydubai said on Thursday it cut its half-year losses by 39 per cent but blamed uncertain economic conditions, including the low oil price as it stayed in the red over the period.
The budget carrier, the second-largest operator at Dubai International after Emirates, posted a Dh89.9-million loss in the six months to June 30 compared to a Dh14.7 million loss in the year ago period.
Revenue grew 5.4 per cent to Dh2.3 billion.
“We have seen continued pressure on yields due to the uncertain international economic situation set against a backdrop of lower oil prices and adverse currency rates,” chief financial officer Mukesh Sodani said in an emailed statement.
“We maintain a sharp focus on cost improvement while pursuing our broader goal of expanding our network and our service offering.”
Passenger growth
Passenger numbers increased 16.5 per cent to 4.9 million whilst the number of business class passengers, per departure, improved by 19 per cent, the airline said.
Fuel accounted for 23.5 per cent of operating costs, from 20.6 per cent in the previous period, which it said was due to lower oil prices and from cutting its hedging position to 22 per cent this year, from 41 per cent last year.
“You get a hint of increased efficiency with passenger numbers growing faster than capacity,” Will Horton, senior analyst at CAPA - Centre for Aviation, told Gulf News by email.
“Both of these metrics were faster than revenue growth but the total picture needs to include fuel costs, which saw a significant drop in operating expense composition.”
Flydubai chief executive Ghaith Al Ghaith said he expects “a stronger second half” and that the airline was following a similar trajectory to 2015 when it reported a half-year loss but full-year profit of Dh100.7 million.
“From our robust platform, we will continue to drive sustainable growth and operational performance to meet the demand for affordable travel from our passengers,” he said in the statement.
Fleet expansion
The airline has started to receive aircraft from its 2013 order of 111 Boeing 737 jets. It said it would receive eight aircraft from that order between May and December this year, including six in the second half.
It also said it added frequencies on existing routes in the first half to Bahrain, Baku, Belgrade, Bucharest, Muscat and Salalah.
In the second half, flydubai is to add a total of 77 weekly flights from Dubai International including launching direct flights to Bangkok in Thailand.
It will also increase the number of weekly flights to Kathmandu in Nepal from Al Maktoum International at Dubai World Central (DWC) from 10 to 14.
