Flydubai sees return to profitability in 2019

Flydubai reached an interim settlement agreement with Boeing.

Flydubai has announced its annual results for the period ending Dec. 31, 2019. The airline reported a total annual revenue of 6 billion dirhams ($1.6 billion), as opposed to 6.2 billion dirhams last year, a decrease of 2.6 percent compared to the same period the previous year. Flydubai reported a profit of 198.2 million dirhams.
Ghaith Al-Ghaith, chief executive of Flydubai, 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.”
Commenting on reaching an interim settlement agreement with Boeing, Al-Ghaith said: “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 toward 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.”
Francois Oberholzer, chief financial officer of Flydubai, 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 percent, whilst we saw double digit growth in our yields minimizing the reduction in revenue to 2.6 percent compared to a fall in capacity of 15.8 percent. Furthermore, we successfully refinanced our debut 2014 sukuk (Islamic bonds) during this financial year.”
The airline carried 9.6 million passengers in 2019.