By Staff writer
Ghaith Al Ghaith says airline will 'remain prudent' as it posts big slump in full-year profit for 2016
The CEO of low-cost carrier flydubai said on Wednesday that he expects flat growth this year amid a "challenging socioeconomic environment".
Ghaith Al Ghaith said the airline will "remain prudent throughout 2017" as yields are forecast to remain under pressure.
His comments came as flydubai announced it made a profit of AED31.6 million ($8.6 million) during 2016 on total revenue of AED5 billion, down from $27.4 million in 2015, a 68 percent fall.
The low-cost airline said in a statement that a stronger second half of the year, driven by increased passenger numbers, was impacted by downward pressure on yield leading to lower overall revenue growth reflecting a continuation of the same adverse factors reported in the first half.
Sheikh Ahmed bin Saeed Al Maktoum, chairman of flydubai, said: “These results see flydubai report its fifth consecutive full-year of profitability. This year, we have carried 10.4 million passengers demonstrating that flydubai continues to help change the way both business and leisure passengers travel around the region.”
Al Ghaith added: “We continue to demonstrate that we gain loyal customers across our network who recognise the benefits of direct air links and enjoy our onboard offering.
"The continuation of mainly lower fuel prices and ongoing cost management efforts are reflected in the 16 percent improvement in terms of available seat kilometres over the last two years. We have however seen a difficult pricing and operating environment."
The statement said fuel costs were 25 percent of operating costs, down from 30.6 percent in the previous year.
Ancillary revenue comprising of baggage, cargo and inflight sales contributed 13.8 percent of revenue, dropping from 15.1 percent.
The airline said growth in the number of flydubai’s Business Class passengers continued and saw the airline carry 2.4 times the number of passengers as in 2014.
The Indian Subcontinent saw the strongest demand for Business Class carrying more than double the number of passengers, followed by the Caucasus which grew by 88 percent as a result of a liberalisation of the visa rules.
flydubai added that it continued to grow its team with a total of 3,773 staff including 746 pilots, 1,618 cabin crew and 282 engineers.
The airline said it will be the first airline in the Middle East to receive the new model Boeing 737 MAX 8 and the first of these aircraft will enter into service in the second half of the year.