Budget carrier flydubai reports 53% drop in 2020 revenue due to the pandemic

Dubai-based budget carrier flydubai on Sunday reported a loss of Dh712.6 million for the period ending December 31, 2020.
Image Credit: WAM

Dubai: Dubai-based budget carrier flydubai on Sunday reported a loss of Dh712.6 million for the period ending December 31, 2020.

The airline, which carried 3.2 million passengers last year, said its total annual revenue fell nearly 53 per cent to Dh2.8 billion in 2020, compared to the same period a year earlier.

During the course of the year, the carrier said it completed two financing facilities amounting to Dh283 million for general corporate purposes.

“The COVID-19 pandemic has impacted us more than any other crisis – we fully recognise that it is the priority of governments to ensure the health and wellbeing of its people,” said Ghaith Al Ghaith, Chief Executive Officer at flydubai.

“The effects of the travel restrictions that were put in place to safeguard against transmission of the virus have heavily impacted the aviation industry,” he added.

MAX impact

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

“Coupled with the effects of the pandemic, performance was also impacted by the 22-month grounding of the Boeing 737 MAX aircraft,” the airline said in its report.

This heavily impacted the financial performance from mid-March, which continued into the second quarter and resulted in a loss of Dh545.2 million for the six-month period ending 30 June.

Headcount

As of December 31, 2020, flydubai has 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 cuts

“During a demanding year for the aviation industry, we optimised all possible revenue generating opportunities and we took early measures to control our costs and preserve liquidity,” said Francois Oberholzer, Chief Financial Officer at flydubai.

“We redoubled our efforts in cost improvement, deferred capital expenditure and raised 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 Dh2.5 billion.”

Challenges remain

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