Dubai: Dubai carrier flydubai transported more than four million passengers during the summer (June to mid-September) this year, up 30 per cent from last year, CEO Ghaith Al Ghaith announced Tuesday.
Al Ghaith said that flydubai operated more than 32,000 flights during the summer, an increase of 22 per cent from last year.
“While it has been the busiest summer in terms of passengers and flights in the history of flydubai, we can do better,” said the CEO.
Al Ghaith acknowledged that the airline fell short of its passenger-carrying expectations due to delays in aircraft deliveries, specifically the Boeing 737 MAXs. The airline had initially projected to transport 4.5 million passengers during the summer of 2023.
The all-Boeing carrier had expected to take deliveries of 17 aircraft in 2023, of which it has received seven. “While it has been the busiest summer, we could’ve done better. For example, we were supposed to get nine aircraft between now and the end of the summer. If we get four, we will be lucky,” said Al Ghaith.
Plane manufacturers Boeing and Airbus have blamed supply chains for delivery delays.
Delivery delays are a challenge
The airline CEO said the shortfall in airline deliveries poses a substantial challenge for flydubai. He said, "We believe these figures (passenger numbers) could have potentially been even higher if the aircraft we ordered had been delivered on schedule. This would have enabled us to add more capacity on some of these popular routes."
flydubai operates a fleet of 78 Boeing 737s serving its expanding network. The carrier is expecting further delays to its scheduled aircraft deliveries this year.
"We are doing everything possible to mitigate the shortages in aircraft. We are also discussing with (lessors) to extend the rental period of two aircraft for longer. This will enable us to add more capacity across the network during the upcoming busy travel periods," he explained.
The carrier signed an agreement to lease four nextgGeneration Boeing 737-800 aircraft between October 17 and April 16, 2024.
New aircraft order?
Despite delays in aircraft deliveries, Al Ghaith said the carrier continues to remain 'extremely interested' in further aircraft acquisitions. When asked if flydubai would announce potential deals during the upcoming Dubai Airshow, Al Ghaith said, "We are not at a level where we can say this will happen during the airshow. It could still happen. However, the delays and supply chain challenges are affecting our decision-making."
Rising fuel costs
Al Ghaith said rising fuel prices undoubtedly impact the airline's pricing strategy. "We've already implemented fuel surcharges and anticipate other airlines will follow suit. Maintaining profitability in the face of such fuel price hikes is challenging, and it's necessary to implement these surcharges to ensure smooth operations," said the CEO.
When asked if flydubai would consider reducing prices to encourage people to travel, Al Ghaith said, "We employ various strategies, including pricing incentives and early ticket purchases, within reasonable limits, as profitability remains a priority. But, it will be increasingly challenging with rising fuel costs."
According to the company's 2022 full-year profit statement, fuel cost remains the single highest operating cost for the airline, with 33.9 per cent of total annual operational costs.
Network expansion to go as planned
Al Ghaith said the delays in aircraft deliveries have not disrupted the company's planned route launches. "All the routes we are planning to launch were made considering the current schedule of aircraft deliveries," said the CEO. flydubai has recently announced the launch of operations to three new destinations – Cairo, Poznan in Poland, and Mombasa in Kenya. The airline operates in a network of 120 destinations in 52 countries.
Open skies agreement with India?
The CEO also expressed his interest in expanding to newer and traditional markets. "We are not doing enough in Africa; there is more to do. The classic ones are still underserved. India is a huge market for us, and we should have an open skies (agreement) with India. With the UAE-India partnership creating a trade corridor, aviation should be liberated to unlock its potential fully," said the CEO.
Regarding recruiting new staff, Al Ghaith said the airline's current workforce stands at 5,300 employees. "We have already completed the recruitment of over 800 staff and will continue to recruit 200-300 more staff later this year. We are currently focused on local recruiting (in Dubai)," he said.