flydubai Reports 2019 Profit of $53.9M on Revenue of $1.6B, Carries 9.6M Passengers
Flydubai reported on Wednesday a 2019 profit of $53.9 million of revenue of $1.6 billion. Annual revenue was down 2.6 percent year-over-year largely attributable to diminished capacity related to the continued Boeing 737 MAX grounding.
Flydubai reported today (March 4, 2020) a full-year 2019 profit of $53.9 million on revenues of $1.6 billion. Revenues were down 2.6% on reduced capacity related to the Boeing 737 MAX grounding. During the year, the airline carried 9.6 million passengers and reached an interim settlement with Boeing for lost revenue. EBITDAR came in at 29.5% of revenue versus 21.8% in 2018. Flydubai closed the year with AED 2.6B ($780M) in cash and equivalents, up from AED 2.1B ($572M) the previous year. Fuel costs for the year were down 9 percent year-over-year to 25.8% of operating costs but expected efficiency savings by the operation of the Boeing 737 MAX remained unrealized. Ancillary revenues (baggage, cargo and inflight sales), contributed 8.9% of revenue versus 9.4% in 2018. In Wednesday’s announcement, flydubai’s Chief Executive Officer, His Excellency Mr. Ghaith Al Ghaith, said,
"We have had to manage a number of unprecedented issues faced by the aviation industry. Our results demonstrate that we have capitalized on the strong fundamentals in our business, but it is regrettable that our growth strategy has been significantly impacted by the grounding of the Boeing 737 MAX. Whilst 2019 has seen a return to profitability it does not reflect the loss of market position and the unfilled opportunities flydubai could have exploited.”
Speaking further on the interim settlement with Boeing, H.E. Mr. Ghaith Al Ghaith added,
“We have concluded an interim settlement agreement with Boeing for certain compensation due to flydubai in relation to the grounding of the Boeing 737 MAX. The details of the interim settlement agreement remain confidential. This agreement has contributed towards this year’s results, but in no way can it compensate for the loss of business opportunity or market share experienced by the airline. Discussions are continuing between the parties regarding the ongoing impact of the grounding.”
On December 12, 2019, flydubai launched direct daily flights to Krabi in Thailand. The flights are codeshared with Emirates and operate with a short interim stop in Yangon, Myanmar. Currently, the carrier has 11 Boeing 737 MAX 8s and three 737 MAX 9s which remain grounded subject to regulatory approval from the General Civil Aviation Authority (GCAA) and regulators in the markets served by flydubai. The MAX grounding has resulted in flight schedule cancellations of 19 percent, but the airline has added capacity through ACMI (Aircraft, Crew, Maintenance & Insurance) agreements during the busy travel season. At the end of 2019, flydubai’s operating fleet included 42 Boeing 737-800NGs and three additional aircraft leased from Smartwings. The carrier’s new head offices are currently under construction and are scheduled to open in 2020. Also commenting on the airline’s 2019 financial results, flydubai’s Chief Financial Officer, Francois Oberholzer said,
“We have had to be even more flexible with the abrupt interruption of our growth and fleet strategy. We have kept a firm grip on the business against the continued uncertainty created by the grounding. Direct operating costs reduced by 17.8%, whilst we saw double digit growth in our yields, minimizing the reduction in revenue to 2.6% compared to a fall in capacity of 15.8%. Furthermore, we successfully refinanced our debut 2014 Sukuk during this financial year.”
Flydubai was founded in June 2009 and currently serves over 90 destinations in 48 countries across Africa, Central Asia, the Caucasus, Europe, the GCC (Gulf Cooperation Council), the Middle East and the Indian subcontinent. The Dubai-based carrier has opened more than 65 routes to under-served markets and will expand its fleet to around 236 aircraft over the next decade. Since commencing operations, flydubai has carried over 75 million guests.