Profit at state-owned budget carrier flydubai plunged last year, a sign of pressure on the Middle East’s aviation sector, but revenue continued rising as Dubai strengthened its role as an international hub.
Profit sank to Dhs31.6m ($8.6m) in 2016, the airline said on Wednesday, from Dhs100.7m in 2015. But revenue increased 2.4 per cent to Dhs5bn.
Flydubai carried a record number of passengers last year, up 14.4 per cent to 10.4 million people, as it launched flights to Bangkok and increased flight frequency on existing routes. Its fleet grew to 57 aircraft from 50.
But chief executive Ghaith al-Ghaith said the pricing and operating environment was difficult. Slower economic growth in the Gulf due to low oil prices and a strong U.S. dollar, to which the United Arab Emirates dirham is pegged, pressured yields.
A flydubai passenger plane crashed in Russia in March last year, killing all 62 people on board. Flydubai said it was continuing to support an investigation into the accident.
“We will remain prudent throughout 2017 as we will continue to operate in a challenging socioeconomic environment. Yields will remain under pressure and we expect to report flat growth in the year ahead,” Ghaith said. The airline said its total capacity would not grow this year.