Fly Dubai reported yesterday that it recorded revenues of six billion dirhams (1.6 billion dollars), compared to revenues of 6.2 billion dirhams (1.7 billion dollars) in the previous year, a decrease of 2.6%.

In a statement issued yesterday about its annual financial results for the fiscal year ending on December 31, 2019, flydubai indicated that it had made profits of 198.2 million dirhams ($ 53.9 million), noting that it had completed an interim settlement agreement with Boeing on compensation.

Passenger transport

Flydubai transported 9.6 million passengers in 2019.

Ghaith Al Ghaith, CEO of flydubai, said: “Over the past year, we have dealt with a number of unprecedented issues facing the aviation sector. Our results show that we have benefited from the strong foundations we have built, but unfortunately our growth strategy has been greatly affected by the suspension of the Boeing 737 MAX aircraft. ”

He added, "Although the year 2019 witnessed our return to profitability, this did not compensate for the decline in our market share, and the opportunities that the carrier was seeking."

Temporary settlement

Regarding the temporary settlement with Boeing, Al-Ghaith said: "We have concluded an interim settlement agreement with (Boeing), to obtain certain compensation due to the suspension of work of the (Boeing 737 Max) flydubai fleet." The details of the interim settlement agreement are kept confidential. This agreement contributed to achieving these results for this year, but it can in no way compensate for the loss of opportunities or market share affected by the carrier. We are in contact with (Boeing), regarding the impact of the continued suspension of (MAX) aircraft. ”

Great flexibility

For his part, Chief Financial Officer of "Fly Dubai", Francois Oberholz said: "(Fly Dubai) dealt with great flexibility with the changes, and the effects of this on our growth and fleet strategy in general. We maintained strong cohesion in our business with the uncertainty arising from the suspension of MAX aircraft. Direct operating expenses decreased by 17.8%, while income witnessed two-digit growth, which led to a 2.6% decline in revenue, with capacity declining by 15.8%. We also succeeded during the current year in refinancing the Sukuk that we issued in 2014. ”

Earnings, before taxes and fees, recorded a growth of 29.5%, compared to 21.1% in 2018, and cash and cash equivalents included advance payments before receiving the aircraft, amounting to 2.6 billion dirhams, compared to 2.1 billion the previous year.

Fuel costs accounted for 25.8% of total annual operating expenses, due to the decline in the prices of "Brent crude" by 9%.

The tanker obtained a long-term financing of $ 500 million on November 14. These facilities were used to refinance the tanker sukuk, which it issued in 2014, and matured on November 26.

Flydubai indicated that it has 11 Boeing 737 MAX 8 aircraft, and 3 MAX 9 aircraft are still suspended. These aircraft will not join the carrier’s fleet, until they obtain regulatory approval from the General Authority of Civil Aviation, and other competent bodies to which the carrier flies.

Flydubai continues its efforts to regularize the flight schedule, but 19% of scheduled flights have been canceled, as a result of the suspension of work on MAX aircraft.

By the end of last year, the company’s fleet size reached 45 aircraft, which were operating on the carrier's network, including 42 of the new generation “flydubai” Boeing 800.737 aircraft, in addition to three of the smart wings company.

Projections for 2020

"Flydubai" stressed that it is difficult to set expectations for 2020, given the uncertainty regarding the timetable for the return of the Max planes to work, and the related schedule for the receipt of new aircraft. "With our current fleet of 45 aircraft, our ability to launch new destinations and add more flights will remain limited," he said. In order to minimize the effects of this on our passengers, the airline is looking for options to extend the duration of the aircraft, which were scheduled to leave the fleet in 2021.