DUBAI: flydubai has reported a full-year profit of $53.9 million for 2019 compared to a loss of$43.4 million in 2018, helped by a compensation agreement with Boeing over the worldwide 737 MAX grounding.
However, revenues dipped to $1.63 billion, down 2.6 per cent from ($1.68 billion) in 2018.
The total number of passengers carried also fell to 9.6 million, a decline of 12.7 per cent from 11 million in 2018.
Ghaith Al Ghaith, Chief Executive Officer at flydubai, said: “We have had to manage a number of unprecedented issues faced by the aviation industry. Our results demonstrate that we have capitalised on the strong fundamentals in our business, but it is regrettable that our growth strategy has been significantly impacted by the grounding of the Boeing 737 MAX.”
“Whilst 2019 has seen a return to profitability it does not reflect the loss of market position and the unfilled opportunities flydubai could have exploited.”
The airline was forced to ground 14 of its Max jets last year and 19 per cent of its flying schedule has been cancelled as a result of grounding.
Al Ghaith confirmed that the airline has reached an interim agreement with Boeing for compensation, which helped boost the 2019 results.
“We have concluded an interim settlement agreement with Boeing for certain compensation due to flydubai in relation to the grounding of the Boeing 737 MAX. The details of the interim settlement agreement remain confidential. This agreement has contributed towards this year’s results, but in no way can it compensate for the loss of business opportunity or market share experienced by the airline. Discussions are continuing between the parties regarding the ongoing impact of the grounding.”
Francois Oberholzer, chief financial officer at flydubai, said: “We have had to be even more flexible with the abrupt interruption of our growth and fleet strategy. We have kept a firm grip on the business against the continued uncertainty created by the grounding. Direct operating costs reduced by 17.8 per cent, whilst we saw double digit growth in our yields minimising the reduction in revenue to 2.6 per cent compared to a fall in capacity of 15.8 per cent. Furthermore, we successfully refinanced our debut 2014 Sukuk during this financial year.”
Looking ahead, the outlook remains “challenging”, given the uncertainty around the timetable for the return to service of the Boeing 737 MAX aircraft and the subsequent aircraft delivery schedule, the airline said.
