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Flydubai reduces H1 loss to $24.5m

Flydubai reduces H1 loss to $24.5m

CEO Ghaith Al Ghaith indicated the airline would see a stronger second half of the year

Low cost carrier flydubai has announced a Dhs89.9m ($24.5m) loss in the first six months in 2016.

The airline said the loss was 39 per cent lower than the first half of 2015 after lower fuel prices allowed it to reduce its hedging position from 41 per cent last year to 22 per cent this year.

This resulted in fuel accounting for 23.5 per cent of operating costs compared to 30.6 per cent in H1 2015..

Revenue for the period was up 5.4 per cent to Dhs2.3bn ($627m) and flydubai carried 4.9 million passengers, up 16.5 per cent on the year before.

Flydubai CFO Mukesh Sodani said the airline had seen “continued pressure on yields” due to the uncertain international economic situation, including lower oil prices and currency fluctuations.

However, CEO Ghaith Al Ghaith indicated the airline would see a stronger second half of the year.

“Looking ahead to the second half of the year, we have started to receive the first deliveries from the order for 111 aircraft placed in 2013 with a total of 8 aircraft scheduled to join our fleet between May and December,” he said.

“Supported by the new aircraft deliveries, we will expand our convenient services across our network and see the start of double daily flights to Bangkok.”

Read: Flydubai to launch double daily service to Bangkok

During the first half, flydubai suffered its first major crash when flight FZ981 was destroyed while attempting to land at Rostov on Don airport on March 10.

Read: Flydubai crash: Initial report confirms pilots were landing in manual mode

“While the immediate aftermath of the tragic crash of FZ981 hit demand, the airline has worked tirelessly to assist all affected parties as well as the investigative authorities. Despite the challenges the tragedy created, flydubai has bounced back strongly,” said Saj Ahmad, head of consulting at Strategic Aero Research.

Flydubai said it saw increased flight frequency to its existing destinations including Bahrain, Baku, Belgrade, Bucharest, Muscat and Salalah during the period and a 19 per cent increase in business class passengers.

Following six expected aircraft deliveries during the second half of the year it said it would add 77 flights per week to destinations including Almaty, Asmara, Astana, Bahrain, Bangkok, Bishkek, Bratislava, Colombo, Dar es Salaam, Entebbe, Erbil, Kiev, Male’, Moscow, Odessa, Prague, Tbilisi, Yerevan, Yekaterinburg and Zanzibar.

“Moving to Dubai World Central by the end of next year will allow flydubai to truly unlock it’s growth capability going forward and its inevitable in my mind they’ll need to exercise and procure more 737MAXs before the decade is out,” said Ahmad.

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