flydubai annual profit up by 47%

flydubai has announced a full-year 2013 net profit of AED 222.8 million ($60.7 million) – an increase of 47% compared with 2012’s result – based on revenue of AED 3.7 billion ($1.0 billion).

His Highness Sheikh Ahmed Bin Saeed Al Maktoum, chairman of flydubai, commented, “2013 was a remarkable year for flydubai. We started the year having achieved our first full year of profitability; we launched business class services across our network and to support our future growth we placed the largest single-aisle Boeing aircraft order in the Middle East.”

“The increase in profitability and focus on ensuring the efficiency of our operations, in spite of a complex operating environment, demonstrates the strength of our business model,” added Sheikh Ahmed. “flydubai remains focused on playing a vital role in the UAE’s economic development and creating free flows of trade and tourism in previously underserved markets.”

Continued demand for travel within a five-hour flying radius of Dubai resulted in an increase in flydubai’s passenger numbers to 6.82 million, a 38% increase compared with 2012.

Aircraft delivery was accelerated resulting in seven new Boeing 737-800s joining the fleet last year. Together with the rolling retrofit programme a total of 14 aircraft are configured with a business class cabin.

The airline, which operates an average of 1,100 flights a week, launched 17 new routes during 2013 bringing the network to 66 destinations. It doubled its network in Russia to eight destinations, took its network in Saudi Arabia to 10 destinations (many of which have not previously had direct flights to Dubai), as well as adding Salalah in Oman. The carrier ended the year with the first direct flights to Chisinau, Moldova.

Within that five hour flying radius of Dubai, the airline has opened up 46 routes that were previously underserved or did not have direct air links to Dubai. Passenger numbers across flydubai’s network demonstrates strong demand with 17% growth in Africa, 24% in the Caucasus, 39% in Central Asia, 55% in Europe including Russia, 37% in the GCC and Middle East, and 41% in the Indian Subcontinent.

flydubai grew its international team, drawn from 99 nationalities, to more than 2,250 employees including 499 pilots and 922 cabin crew.

Ghaith Al Ghaith, CEO of flydubai, commented, “The achievements of the past year could not have been delivered without the commitment and hard work of our experienced team, together with our partners, who are focused on exceeding our passengers’ expectations on board flydubai.”

Fuel expense remains the single largest operating cost at 39.5% of total costs. During the last quarter of 2013, flydubai started hedging and 29% of the total fuel requirements for 2014 have been hedged.

Ancillary revenue remained a significant component of total revenues and accounted for 14.6% in 2013. flydubai Cargo, a growing ancillary revenue stream, continued to demonstrate strong growth and implemented the use of electronic Air Waybills (e-AWB) across its operations. Other ancillary revenue items include flydubai’s inflight entertainment, onboard sales, seat preferences, checked baggage allowance, car rental, hotel bookings, travel insurance and visa facilitation services.

At the 2013 Dubai Airshow, flydubai committed to ordering 75 Boeing 737 MAX 8s and 11 more 737-800s, valued at $8.8 billion at list prices. In addition, the airline retains purchase rights for 25 more 737 MAXs. The first aircraft from this order, the 11 737-800s, will be delivered between 2016 and 2017. Deliveries of the first Boeing 737 MAX will commence in the second half of 2017 and continue until the end of 2023.

Looking ahead, flydubai believes the operational climate in 2014 will remain challenging. This year will see the delivery of eight aircraft enabling flydubai to continue the expansion of its network.

The airline continues to roll-out its Business Class product across the network and at the end of February it was available on 46 routes. Destinations including Abha, Baku, Basra, Belgrade, Gassim, Krasnodar, Muscat, Najaf, Tbilisi, Volgograd, Yanbu and Yerevan are some of the cities that will have Business Class available on board during the course of the year.

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