Flydubai is on course to make its first profit this year as the low cost carrier aims to dramatically expand its fleet to 50 planes in the next four years.
Flydubai looks to soar into black
Flydubai is on course to make its first profit this year as the low-cost carrier aims to dramatically expand its fleet to 50 planes in four years.
The airline, which was founded in March 2008 by the Government of Dubai and began flying in June 2009, was likely to leave the red for the first time, said its chief executive, Ghaith Al Ghaith.
"We have said that we would make profit by the end of this year," he said. "We are still a few months to go but I hope we can keep that promise. For us, making money is second nature, you cannot operate if you are not successful."
Flydubai currently flies to 51 destinations and has earmarked 20 more possible routes for the next few years.
This year, it has launched seven new routes - to Bucharest, Sana'a, Basra, Najaf, Bishkek, Taif and Skopje - and will add Tabuk in Saudi Arabia this month.
Mr Al Ghaith said government subsidies for airlines, a hot topic in the world of aviation, were detrimental to competition and negative for consumers.
"[Airline subsidies are] not sustainable because the airline can make lots of money but it can also lose lots of money. So if you hide the cost or try to protect it, suddenly you are faced with costs you cannot control," said Mr Al Ghaith. "It's better for sustainability if you can make money."
Flydubai signed an order worth US$3.78 billion (Dh13.88bn) with Boeing for 50 planes at the Farnborough Air Show in 2008.
Last month the airline took delivery of the first of three Boeing 737-800NG aircraft, financed through a $117.5 million loan agreement with the Export-Import Bank of the United States (Ex-Im Bank).
The next two aircraft will arrive this month and in December, taking the total fleet to 28 aircraft. It will add six more aircraft next year.
Mr Al Ghaith said the airline was talking to local banks about financing options for the further 22 aircraft it was set to fly by 2016.
"We will have to finance the fleet. We are always in the market to do more," he said.
"We will continue to look at sale and leaseback opportunities. We will continue to look at Ex-Im Bank and will also look at conventional banking loans to fund our future aircraft."
Mr Al Ghaith added that the financing market in the UAE had improved since the airline's inception, giving it another option, having used only sale and leaseback agreements before securing the funding from Ex-Im Bank.
"Financing is very much available from consortiums," he said. "The liquidity is at a much better situation than before. There are a lot of people coming forward so we believe we will tap into that in the future also."
In addition to the new routes, flydubai has increased the number of flights across its network by 41 per cent between August last year and the same month this year.
Mr Al Ghaith said that Iran, India and Pakistan offered a huge opportunity for expansion.
"These three are main areas, but our capacity in those areas does not even represent 3 per cent of our current capacity," he said.
The airline does not fly to Iran and operates to one destination in Pakistan and three in India.