Flydubai's loss widens in first half of 2018 on rising fuel costs
However, the low-cost carrier’s revenues were up 10% on the year-earlier period despite the oil price impact
Dubai-based low-cost carrier flydubai widened its first half loss to Dh316.8 million compared with the same period last year, as rising oil prices increased fuel costs for the airline.
Flydubai reported a price impact of Dh175m in the first half of this year due to a 35 per cent increase in the average Brent crude oil price compared to the same period last year, it said in a statement on Wednesday.
The airline’s loss widened from the Dh142.5m reported for the six months of 2017. Total revenue for the period increased 10.4 per cent to Dh2.8 billion from a year earlier, flydubai said.
“We have continued to see a tough trading environment and the half-year results reflect these short-term challenges,” said Ghaith Al Ghaith, chief executive of flydubai. “We continue, however, to invest in our fleet, network and operations recognising opportunity as we look to the future.”
Flydubai’s revenue per passenger kilometre (RPKM) grew by 6.5 per cent compared to the same period last year, and passenger numbers remained steady at 5.4 million. The carrier contributed 12.3 per cent of all traffic in Dubai during the period.
“Although higher oil prices will continue to affect our operating costs and performance in the second half, pricing stability at the current level is likely to stimulate demand for regional travel,” Mr Al Ghaith added.
During the first half of the year, flydubai’s total fleet size remained steady at 61 aircraft, but the carrier said in the second half it will take delivery of seven new Boeing 737 aircraft, including four Boeing 737 MAX 8.
As part of a network review in recent months, flydubai launched or restarted 10 routes in the first half of 2018 and announced five new destinations, while cancelling services to 10 other destinations and suspending a further two, it said.
Flydubai continues to expand its network through its partnership with Emirates, intended to gain efficiencies during a period in which airlines were struggling to boost their bottom lines amid increasing competition in the global industry.
The two carriers agreed in July last year to operate an “expanded” codeshare agreement with increased schedule alignment, fleet and network sharing, as well as alignment of frequent flyer programmes. Their combined network so far includes more than 83 destinations and the carriers are on track to reach 240 destinations by 2022, flydubai said on Wednesday.
From December, select flights to 10 destinations will relocate to Terminal 3 at Dubai International as Emirates and flydubai continue to work closely together to increase connectivity. Flydubai has also awarded a number of contracts in the first half of the year for the construction of its Dh700 million headquarters, it added.
Updated: September 5, 2018 06:14 PM