Sometimes, what ruins good news is the knowledge that it could be even better under different circumstances. In this case, Dubai-based budget airline flydubai has announced a 38% reduction in losses compared to the same period a year before. What could have made it better? Having a more efficient aircraft, as was the original plan before the Boeing 737 MAX was grounded worldwide.
Full potential not realized
According to AirwaysMag, the company says full potential fuel savings have not yet been realized. This is “due to the deployment of the Next Generation Boeing 737-800 aircraft on our longer routes”.
“Our performance has however been significantly impacted by the grounding of the Boeing 737 MAX aircraft and our Half-Year Results are not representative of what we had expected to report; we were expecting a significantly improved performance.” -Ghaith Al Ghaith, Chief Executive Officer of flydubai
The financial results of their first half (up to June 30) of this year show a loss of US$53.6m. This is down 38% compared to the same period in 2018. Here are some other figures released by the airline, according to AirwaysMag:
- Fuel costs for the airline have decreased by 17.3% to AED740m from AED895m.
- Passenger numbers decreased to five million, representing a 7.5% drop due to a reduction in capacity.
- Revenues for the carrier remain the same from the same six-month period: US$759m.
The 737 MAX effect
At this point, it’s probably incredibly rare to find someone who doesn’t know about the 737 MAX crisis and grounding. We’ve certainly reported extensively on it. For flydubai, the grounding means that it isn’t flying the 11 737 MAX8s and three 737MAX9s that it should be.
However, that’s not where the trouble ends for flydubai. According to AMEinfo, the airline had also retired five aircraft as they were returned to the lessor in anticipation of being able to use their new MAX jets. Fortunately, the airline negotiated a lease extension for two Boeing 737-800 NextGen aircraft which were scheduled to leave next year.
AMEinfo also reports that the airline’s Chief Financial Officer made the following remarks:
“…we have taken every effort to minimise flight cancellations and maximise revenue opportunities. Unavoidably, this led to a reduction in ASKM by 14.9% which meant that we were not able to fully exploit demand opportunities.
The cost efficiency programmes, we introduced at the beginning of the year, have yielded the planned benefits with the exception of the fuel efficiencies from the MAX deployment plan.
These programmes were never intended nor could have offset the financial impact of the grounded Boeing 737 MAX aircraft”
-Francois Oberholzer, Chief Financial Officer, flydubai
Despite being unable to use the 737 MAX jets it has purchased, the airline still launched routes to places like Tashkent, Uzbekistan, Naples, Italy and Sochi, Russia. This takes their destination count to 92 cities in 48 countries.
“…in our 10th Anniversary year, we had expected to grow our fleet and continue with our plans to expand our network. Without any deliveries of new aircraft and no visibility of the timelines, we will see our operating fleet reduce in size to what it was in 2014. This is disappointing.” -Ghaith Al Ghaith, Chief Executive Officer, flydubai
I’ve flown with this airline twice and enjoyed their basic low-cost service. Both flights were incredibly undersold and empty though. What has your experience of flydubai been so far? And will you fly aboard their 737MAX jets once the ban has been lifted? Let us know in the comments.