Flydubai reports 2015 profit
Flydubai has reported profits of AED 100.7 (USD 27.4 million) for 2015 following a stronger second half-year which saw increased numbers of passengers travel across its network.
Total revenue for the full year was AED 4.9 billion (USD 1.33 billion), an increase of 11% compared to 2014. The overall yield, in terms of fils per Revenue Passenger Kilometre (RPKM), was under pressure attributable to the strong dollar; the challenging trading environment across the network; disruption resulting from the suspension of flights on some established routes and a large number of recently launched routes with a lead time required to reach maturity.
Sheikh Ahmed bin Saeed Al Maktoum, chairman of Flydubai, said: “2015 was an important year for flydubai. It was a year in which through determination and commitment we continued to realise our vision to increase connectivity in support of the UAE’s economic development. The year culminated in two achievements: the delivery of our 50th aircraft; and our fourth full-year of profitability.”
Ghaith Al Ghaith, chief executive officer added: “The overall trading environment has remained challenging but we have maintained our growth story and ended the year positively. Our robust passenger growth of 30%, in terms of RPKM, underlines the demand for travel within our geographic focus; the continued appeal of Dubai as a destination; and the popularity of our service.”
A stronger performance in the second half of the year coupled with cost management efforts has resulted in a positive end to the year.
Fuel costs reduced to 30.3% of operating costs benefitting from lower fuel prices with 59% of fuel costs unhedged. In line with flydubai’s active fuel hedging policy, 16% of the fuel requirements for the next 24 months are currently hedged. This will provide a level of certainty and control to its fuel costs due to the ongoing fluctuation in fuel prices.
EBITDAR reduced slightly compared to the previous year, but remained healthy at 20.5% of revenue.
The closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, was robust at AED 2.4 billion.
Al Ghaith said: “The solid foundation we laid when the airline launched has ensured that we are best placed to respond quickly to manage the challenging socio-economic environment, in a controlled manner, both in the short term and for the long term.”
Analyst Saj Ahmad commented: “Flydubai's 2015 performance managed to not only turn around losses that had been seen in the first half of the year, but it also managed to sharply increase revenues by over 11% compared to the previous year.
“The rise in passenger numbers to over 9 million demonstrates the extreme robustness in the GCC low cost travel market and Flydubai's expansion pace coupled with its services starting out at Al Maktoum International has helped broaden its reach to new markets that previously had little or no services.
“The decrease in fuel prices too has benefitted the carrier as it drives performance through higher airplane utilisation. Flydubai now has the highest utilisation rate of any narrowbody operating airline with almost 14 hours a day being operated across its exclusive fleet of Boeing 737-800s.”
Ahmad added: “The arrival of its first 737 MAX 8 airplanes next year will significantly allow Flydubai to leverage the strength of these fuel efficient jets even further and use the additional range to penetrate more city pairs that were not possible before. Flydubai's dominance at the leading low cost hybrid airline in the GCC shows no sign of stopping and its no surprise that the airline will shift to Dubai World Central so that it can truly unlock its organic growth potential.”