FLYDUBAI AIMS TO BOOST FLEET

Budget carrier forecasts another ‘challenging year’ but still plans to go ahead with new routes in early 2018

Low-cost carrier flydubai is in multibillion-dollar talks to buy “at least 100” new passenger jets in the coming months as it looks to renew its current book set to expire in 2023, the airline’s chief executive said.

“We are definitely in the market for a new order,” flydubai chief executive Ghaith Al Ghaith said at the Dubai Airshow. “We are generally always in talks with [Boeing and Airbus] and we are in intense talks with them now.”

The airline, which entered into an expanded codeshare agreement with Emirates in July, is looking at a potentially bigger model of aircraft than its current fleet of mainly Boeing 737-800s as it reviews its fleet. The top end of the 737 family is the 737 Max 10, which cost US$124.7 million at list prices. A popular model with other budget carriers is the 737 Max 8, priced at $112.4m.

“For us, we change aircraft every eight years and we have an order book now of 100,” Mr Al Ghaith said. “That order book expires in 2023, so we are now in the market to ensure we do something for beyond that. But we are not in a rush.”

Flydubai is “looking for similar aircraft [to what it has] – maybe even a little bigger,” he said. “For example, if you look at the Boeing family, there is the 800, the 900 and the 1000, and on the Airbus side, we have the A320, the A321 and the Max. All of these aircraft are options.”

It is unlikely that flydubai would have a mix of both Airbus and Boeing aircraft in its fleet, as the operating cost would increase.

“I’m sure our next order will be more than 100, for sure,” Mr Al Gaith said. “We are not in a rush, but of course I would love to have signed a deal at this air show.” When asked if this was not going to happen, he responded: “I don’t think so,” and said around the end of the year was more feasible.

The partnership with Emirates, under which the two carriers are expanding their shared network to reduce route duplication and achieve efficiencies, is “going very well – we have managed to improve connectivity between the two airlines from three hours to two hours and have launched over 40 new routes on the codeshare,” he said.

The 2017-18 operating year will be “as challenging as last year” for flydubai, which reported widening losses in August. The airline recorded a loss of Dh142.5m for the first six months to the end of June, compared with a loss of Dh89.9m for the same period in 2016. Flydubai reported a 69 per cent decline in its earnings in 2016 because of the challenging operating environment.

“Our second half of the year is always better than the first half and we are on trend with that,” he said. “I think this year will be as challenging as last, nothing much has changed, even though fuel prices have gone up to $60 per barrel.”

In the long term the “oil price is going in the right direction” to help regional airlines recover after a tough period, he said.

Flydubai intends to open “a handful” of new routes within the next two months, Mr Al Ghaith said, adding that eastern Europe was a key growth opportunity for the airline. “Some of these routes will be driven by the relationship with Emirates.”

A merger with Emirates is out of the question. “I personally don’t see that because each airline has its own identity and we work on areas of collaboration, of which there are plenty of course,” he said.