UAE’s flydubai reports loss of $194m for 2020

Dubai-based carrier flydubai has reported a loss of Dhs712.6m ($194m) for the period ending December 31, 2020.

The carrier also reported total annual revenue of Dhs2.8bn ($773m) for 2020, dipping 52.7 per cent compared to Dhs6bn ($1.6bn) in 2019.

During the course of the year, the airline ferried 3.2 million passengers and completed two financing facilities amounting to Dhs283m ($77m) for general corporate purposes.

During 2020, the number of countries on the carrier’s network dwindled to 37 from 47 in 2019, while the number of destinations pared to 65 from 93. A total of 1,092 employees were on unpaid or voluntary leave last year.

Besides the airline’s operations affected by the closure of international borders and suspensions of flights due to the pandemic, the carrier’s performance was also impacted by the 22-month grounding of the Boeing 737 MAX aircraft, affecting the financial performance from mid-March, continued into the second quarter, that resulted in a loss of Dhs545.2m for the six-month period ending June 30, a statement on the carrier’s website detailed.

The strategy defined at the start of the pandemic to develop alternative revenue sources and contain costs gained steam during the third and fourth quarters minimising the second half loss to Dhs167.4m.

Ghaith Al Ghaith, chief executive officer at flydubai, said: “The Covid-19 pandemic has impacted us more than any other crisis. We fully recognise that it is the priority of governments to ensure the health and wellbeing of its people. The effects of the travel restrictions that were put in place to safeguard against transmission of the virus have heavily impacted the aviation industry.”

“The ongoing impact of the grounding of the MAX aircraft required our engineering and maintenance team to put an active aircraft storage programme in place. The resulting 18 hours of maintenance per aircraft each week placed additional demands on their already extensive workload. The range and efficiency of the MAX aircraft would have been beneficial to exploring additional revenue opportunities during this challenging period,” he added.

“The challenges we faced in 2020 meant that there were difficult decisions to be made. The priority however was to protect our employees. I fully recognise that in order to be able to achieve this our employees had to take periods of unpaid leave or work at reduced salary levels. I fully recognise that this created some hardship, but it has meant that we have been able to maintain employment levels.”

“During a demanding year for the aviation industry, we optimised all possible revenue generating opportunities and we took early measures to control our costs and preserve liquidity. We redoubled our efforts in cost improvement, deferred capital expenditure and raised new financing facilities. The proactive steps we took at the start of the pandemic enabled the airline to end the year with cash assets, including pre-delivery payments, of Dhs2.5bn,” said Francois Oberholzer, chief financial officer at flydubai.