LCC flydubai reported a full-year loss of AED159.8 million ($43.5 million), reversed from a profit of AED37.3 million for 2017. In its annual financial statement released Feb. 20, the airline did not clarify if the loss figure represented an operational or net result.
Despite a better 2018 second half—which saw a profit of $43 million—the full-year results through Dec. 31, 2018 were impacted by increasing fuel costs, rising interest rates and unfavorable currency exchange movements.
Full-year revenue was up 12.4% year-over-year (YOY) to AED6.2 billion. Fuel costs were 29.8% of total annual operating costs, compared to 25% for the year-ago period. Total operating costs were AED411 million.
Flydubai CEO Ghaith Al Ghaith said: “In line with expectations, 2018 was a challenging year; however, we have continued to invest in our capacity and increased revenue. We optimized our network by increasing flight frequencies on existing routes and adding new routes and as they become established they will support our further growth.”
Passenger numbers were 11 million, a moderate YOY increase.
The LCC took delivery of seven Boeing 737 MAX 8s and -9s. The airline took four 737-800s out of service when their operating leases expired.
Flydubai CFO Francois Oberholzer said: “Following our half-year results, we continued to focus on further efficiency programs across the business and these have resulted in a better second half. The emphasis we have put on these programs is expected to result in an improvement to our financial performance.”
Yield improved by 8.4% YOY. Ancillary revenue comprising baggage, cargo and inflight sales contributed 9.4% in revenue compared to 11.9% a year ago.
The expanded cooperation between flydubai and Emirates Airline launched operations to 11 destinations at Dubai International Airport Terminal 3. The second year of the codeshare is expected to continue to deliver benefits for customers as the partnership strengthens. The combined network is on track to reach 240 destinations by 2022.
This month, flydubai will begin operating three 737 MAX 9 aircraft. This year, seven 737 MAX 8s will join the fleet, while nine leased 737-800s will be returned as leases expire.
“As we go into 2019, we are cautious, but we remain confident in the knowledge that there remains much untapped opportunity and demand for travel across our network. Our priorities are to grow the airline sustainably, open up previously underserved markets, and invest in our fleet and cabins,” Al Ghaith said.