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Flydubai back in the black on solid business fundamentals and increased passenger demand

The Dubai-based airline rebounds above pre-pandemic levels as travel restrictions eased

Flydubai on Monday announced that it is back in the black, posting $229 million in profits in 2021, after heavy losses suffered by the world’s Covid-hit airline industry.

The Dubai-based airline swung to a profit of Dh841 million ($229 million) last year surpassing pre-pandemic figures as demand increased after travel curbs eased globally, it said on Monday.

The profit compared with a loss of Dh712.6 million in 2020 when the airline, which lacks a domestic market, was hit by international closures imposed because of the Covid-19 crisis.

Revenue jumped 86 per cent to Dh5.3 billion. The profit figures even topped the Dh198.2 million reported in 2019.

Flydubai, which is owned by Dubai government , carried 5.6 million passengers last year, a 76-per cent leap from 2020 when it lost $186 million at the height of the coronavirus pandemic.

Tremendous results

Sheikh Ahmed bin Saeed Al Maktoum, Chairman of flydubai, said the tremendous results flydubai is reporting for 2021 come after a very challenging two years as a result of the Covid-19 pandemic.

He said the decisions taken by the UAE’s leadership, which saw the implementation of the precautionary safety measures throughout the customer journey, gave visitors the confidence to travel to Dubai; resulting in a 76 per cent year-on-year increase in passenger numbers.

"We remain well placed to continue to welcome passengers across our network to Dubai and beyond. Flydubai is intrinsic to Dubai’s travel and tourism industry,” he said.

Dubai, a tourism and trading hub, has since October been hosting the delayed Expo 2020 world fair, which ends on March 31.

In July 2020 Dubai became one of the world’s first locations to reopen to foreign travel.

Dubai airport last year remained the world’s busiest in terms of international passengers, numbering about 29.1 million in 2021.

Strong business model

Ghaith Al Ghaith, chief executive officer at flydubai, said flydubai’s business model remains strong and has served us well through the pandemic.

"As demand returned these strong fundamentals have translated into a significant improvement in our financial performance. This achievement has been made possible by the commitment of our hardworking employees combined with our business agility,” he said.

While commenting on the travel restrictions that were in place across its network, Al Ghaith said a challenge that remained throughout 2021 was the constant changes to the travel restrictions. This meant that passengers did not have the confidence to book travel early, however they continued to travel with a shorter booking window ahead of their date of travel.

"During the second half of the year, travel restrictions began to ease which led to an increase in demand for travel across our network. We launched flights to seasonal summer destinations to offer more options for passengers and the increase in our flight schedule in the second half of the year supported the demand for inbound travel to Dubai,” he said.

Key highlights for the year 2021

> 22 new routes were launched in 2021, 13 of which were unserved destinations from Dubai

> The top 10 busiest routes for scheduled flights across the flydubai network were Alexandria (HBE), Bahrain (BAH), Bucharest (OTP), Doha (DOH), Karachi (KHI), Kathmandu (KTM), Male’ (MLE), Tbilisi (TBS), Tel Aviv (TLV) and Zanzibar (ZNZ).

> To meet the demand for travel over the summer, the airline launched flights to five destinations for the summer season: Batumi (BUS), Bodrum (BJV), Mykonos (JMK), Santorini (JTR) and Trabzon (TZX).

> With the easing of the travel restrictions around the network, flydubai has seen an increase in the demand for travel. In January 2020, flydubai operated 5,701 flights. The number of flights surpassed pre-pandemic levels in December 2021 when the airline operated 6,430 flights

> Flydubai has seen an increase in demand for connecting traffic with 34% of passengers connecting on to the flydubai network or through its codeshare with Emirates

> Demand for Business Class increased in the following regions on the flydubai network:

. The GCC saw an increase of 42% in 2021 up from 35% in 2019

. Europe saw an increase of 51% in 2021 up from 41% in 2019

. Africa saw an increase of 42% in 2021 up from 35% in 2019

> The fleet expanded to 59 aircraft including 34 Next-Generation Boeing 737-800, 22 Boeing 737 MAX 8 and 3 Boeing 737 MAX 9 aircraft

> The Boeing 737 MAX aircraft rejoined the airline’s fleet from April which were maintained in active storage to facilitate a seamless return to service

> Flydubai will continue to operate a mixed fleet of Next-Generation Boeing 737-800 and Boeing 737 MAX aircraft

> In July, flydubai reached an agreement with Boeing and the airline has adjusted its aircraft orders which had been placed in 2013 and 2017. Flydubai revised down the total number of aircraft it will receive by 65 aircraft. As at December 31, 25 aircraft had been received from its orders with 161 aircraft due for delivery

> Flydubai completed the financing requirements for 13 Boeing 737 MAX aircraft and two LEAP-1B engines by sale and leaseback to support aircraft deliveries during 2021

> Flydubai moved into its new Campus in April bringing its team together and creating a greener and sustainable working environment with a LEED certification. The Campus includes a Training Centre for its crew

> Since the airline’s extended codeshare partnership with Emirates was launched in 2017, more than 8.3 million passengers have enjoyed seamless connectivity across the joint network

Outlook statement for 2022

The airline’s strategy for the year ahead is to contribute to the rebuilding of the travel sector following the Covid-19 pandemic. From March 2022, flydubai will take delivery of 20 Boeing 737 MAX 8 aircraft, which will see further deployment of its onboard product and support the airline’s future growth. These aircraft will be deployed across the network to provide customers with the opportunity to travel to more places, more often.

“With the lifting of restrictions across our network and increasing demand for travel, we are cautiously optimistic about the year ahead notwithstanding the geopolitical situation and its potential effect on the pricing of commodities,” Al Ghaith said.

“During 2022, we will see the largest number of aircraft delivered in any year since the launch of the airline. As the momentum for travel continues to build, we will increase frequencies and introduce new destinations on our network during 2022. To support this growth trajectory, we will need to recruit the best people in the industry willing to contribute to flydubai’s continued success story,” he added.

— muzaffarrizvi@khaleejtimes.com