May 10, 2021

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Low-cost airline flydubai has reported a 53% drop in 2020 revenue due to the pandemic



Dubai-based flydubai, the economic carrier, announced on Sunday a loss of 712.6 million dirhams for the period ending December 31, 2020.
Photo Credit: WAM

Dubai: flydubai, a Dubai-based budget airline, on Sunday announced a loss of 712.6 million dirhams for the period ending December 31, 2020.

The airline, which carried 3.2 million passengers last year, said its total annual revenue fell by 53 percent to 2.8 billion dirhams in 2020, compared to the same period the previous year.

During the year, the company said it completed two financing facilities worth 283 million dirhams for the purposes of the general company.

“The COVID-19 pandemic has affected us more than any other crisis – we are fully aware that the priority of governments is to ensure the health and well-being of their people,” said Ghaith Al Ghaith, CEO of flydubai.

He added that “the effects of the travel restrictions that have been put in place to protect against the transmission of the virus have severely affected the aviation industry.”

Max effect

Flydubai said it had severely curtailed its flight operations for 14 weeks between March 24 and July 7 last year.

The company said in its report: “In addition to the effects of the epidemic, the performance was also affected by the suspension of the Boeing 737 MAX aircraft for a period of 22 months.”

This significantly affected the financial performance from mid-March, which continued until the second quarter and led to a loss of 545.2 million dirhams for the six-month period ending June 30.

Number of Employees

As of December 31, 2020, flydubai had 3,796 employees on its payroll and 1,092 workers on unpaid or voluntary leave. The airline had a total of 3,922 employees in 2019.

Cost reductions

“During a difficult year for the aviation industry, we improved all potential revenue generation opportunities and took early measures to control our costs and maintain liquidity,” said Francois Oberholzer, chief financial officer at flydubai.

“We have doubled our efforts to improve costs, delay capital expenditures and raise new financing facilities,” said Oberholzer. “The proactive steps we took at the start of the pandemic enabled the airline to end the year with cash assets, including pre-delivery payments, of 2.5 billion dirhams.”

Challenges remain

“We have shown that flydubai is well positioned to identify new opportunities and get up and running quickly by deploying our narrow-bodied aircraft,” Al Ghaith said. “We expect trading conditions to remain challenging and business fundamentals to remain strong.”