Fly­dubai’s 2015 rev­enues surge 11pc amid chal­lenges

The Pak Banker - - BUSINESS -

Fly­dubai de­clared Dh4.9 bil­lion rev­enues for 2015, show­ing an 11 per cent year-on-year growth, de­spite chal­leng­ing en­vi­ron­ment. Last year, the Dubai-car­rier car­ried 9.04 mil­lion pas­sen­gers, record­ing a 25 per cent growth over pre­vi­ous year.

Shaikh Ahmed bin Saeed Al Mak­toum, chair­man of fly­dubai, Pres­i­dent of the Dubai Civil Avi­a­tion Au­thor­ity, Chair­man of Emi­rates air­line and Chief Ex­ec­u­tive of the Emi­rates Group, said: "2015 was an im­por­tant year for fly­dubai. It was a year in which through de­ter­mi­na­tion and com­mit­ment we con­tin­ued to re­alise our vi­sion to in­crease con­nec­tiv­ity in sup­port of the UAE's eco­nomic de­vel­op­ment. The year cul­mi­nated in two achieve­ments: the de­liv­ery of our 50th air­craft; and our fourth full-year of prof­itabil­ity."

Ghaith Al Ghaith, chief ex­ec­u­tive of­fi­cer of fly­dubai, said: "The over­all trad­ing en­vi­ron­ment has re­mained chal­leng­ing but we have main­tained our growth story and ended the year pos­i­tively. Our ro­bust pas­sen­ger growth of 30 per cent, in terms of RPKM, un­der­lines the de­mand for travel within our geo­graphic fo­cus; the con­tin­ued ap­peal of Dubai as a desti­na­tion; and the pop­u­lar­ity of our ser­vice."

A se­nior avi­a­tion an­a­lyst said that while fly­dubai had strug­gled and fell into a loss for the first half of 2015, the air­line man­aged to stage a stun­ning re­ver­sal of for­tunes, bouyed by a far stronger se­cond half of the year on in­creased travel de­mand that led to a sharp rise in traf­fic of over 25 per cent to over nine mil­lion pas­sen­gers.

"Fly­dubai has demon­strated that its unique hy­brid low cost model with pre­mium fares has won it many plau­dits and ac­co­lades while ce­ment­ing its po­si­tion as the world's fastest grow­ing air­line. The chal­lenge now is how to con­tinue this growth tra­jec­tory as smoothly as pos­si­ble whilst en­sur­ing that Al Mak­toum In­ter­na­tional can han­dle its size," Saj Ah­mad, the chief an­a­lyst at Lon­don­based Strate­gicAero Re­search, told Khaleej Times.

The air­line said fuel costs re­duced to 30.3 per cent of op­er­at­ing costs ben­e­fit­ting from lower fuel prices with 59 per cent of fuel costs un­hedged. In line with fly­dubai's ac­tive fuel hedg­ing pol­icy, 16 per cent of the fuel re­quire­ments for the next 24 months are cur­rently hedged. This will pro­vide a level of cer­tainty and con­trol to its fuel costs due to the on­go­ing fluc­tu­a­tion in fuel prices. The clos­ing cash and cash equiv­a­lents po­si­tion, in­clud­ing pre- de­liv­ery pay­ments for fu­ture air­craft de­liv­er­ies, was ro­bust at Dh2.4 bil­lion.

Ghaith Al Ghaith, CEO of fly­dubai, com­ment­ing on fly­dubai's cost per­for­mance, said: "The solid foun­da­tion we laid when the air­line launched has en­sured that we are best placed to re­spond quickly to man­age the chal­leng­ing so­cio-eco­nomic en­vi­ron­ment, in a con­trolled man­ner, both in the short term and for the long term."

Busi­ness Class was in­tro­duced on 17 new routes in 2015 rep­re­sent­ing 87 per cent of all de­par­tures from Dubai. Fly­dubai saw the num­ber of pas­sen­gers from across its net­work who trav­elled in Busi­ness Class in­crease by 72 per cent com­pared to 2014. In­creased ac­ces­si­bil­ity to pre­vi­ously un­der­served mar­kets has ben­e­fited cargo rev­enues which re­main strong, post­ing an in­crease of 28.4 per cent with 40,441 tonnes car­ried dur­ing the year.

Start­ing in May, fly­dubai will take de­liv­ery of 16 new air­craft over the next 24 months. This in­cludes five new Boe­ing 737 MAX 8 air­craft due to ar­rive in the se­cond half of 2017.

The air­line's route net­work will con­tinue to strengthen as it sees all the 41 new routes launched in the last two years ma­ture. Fly­dubai has a net­work of 89 des­ti­na­tions in 43 coun­tries. Al Ghaith said: "Our net­work is ma­tur­ing and so we con­tinue to mon­i­tor ca­pac­ity and re­view the op­por­tu­ni­ties for ex­ist­ing routes as well as for new routes. In re­sponse to the chang­ing en­vi­ron­ment, con­sid­ered, bal­anced ad­just­ment and man­age­ment will be re­quired. Our pru­dent out­look will help fly­dubai re­main well-po­si­tioned to take ad­van­tage of the op­por­tu­ni­ties within our fly­ing ra­dius and con­tinue our sus­tained growth tra­jec­tory."

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