Low cost carrier Flydubai more than doubled its losses in the first half of the year citing higher fuel costs and tough economic conditions.
The airline reported a Dhs316.8m ($86.3m) net loss for the six months to the end of June compared to Dhs142.5m in the same period in 2017, an increase of 122.32 per cent.
Total revenue increased 10.4 per cent to Dhs2.8bn ($761m) while passenger numbers remained steady at 5.4 million.
In its first half statement, the airline said a 35 per cent increase in average Brent crude oil prices in the first half had cost it Dhs175m ($47.6m).
Flydubai also said it had cancelled flights to some destinations and invested in others after conducting a route review in the face of tough economic and geopolitical conditions linked to rising interest rates and the stronger dollar.
“We have continued to see a tough trading environment and the Half-Year Results reflect these short-term challenges. We continue, however, to invest in our fleet, network and operations recognising opportunity as we look to the future,” said CEO Ghaith Al Ghaith.
“Although higher oil prices will continue to affect our operating costs and performance in the second half; pricing stability at the current level is also likely to stimulate demand for regional travel.”
The airline announced the appointment of Francois Oberholzer as its new chief financial officer and said it would take delivery of seven Boeing 737 Max 9 aircraft in the second half.
Al Ghaith said the airline had invested significant resources in its codeshare with sister airline Emirates, which should increase connectivity at Dubai International Airport.
It contributed 12.3 per cent of all traffic in Dubai in the first half.
The airline previously reported a 17.4 per cent increase in profit for 2017 as a whole to Dhs37.3m ($10.1m) compared to $8.6m in 2016.
“With oil reaching almost $80 a barrel, it comes as little surprise that the airline swung to a loss. However, flydubai’s traditional strong second half performance should see the airline recover this and get back into the black,” said StrategicAero Research chief analyst Saj Ahmad.
“Key to getting back into profit later in the year will be the continued push towards further integration and connectivity benefits with its partnership with Emirates.”