Flydubai inks 3 deals, rules out 2011 order

DUBAI - Flydubai on Tuesday made three announcements worth $244 million and ruled out new order for aircraft purchase this year at Dubai Airshow.

Dubai’s low-cost carrier announced signing of $170 million financing deal with MC Aviation Partners, or MCAP, to finance two Boeing 737-800NG scheduled for delivery early next year.

“There has been much speculation about purchasing of 737Max and Airbus’ A320new. We are not announcing now, but later-on, flydubai chief executive officer Gaith Al Gaith said at a news conference on the third day of the airshow.

Al Gaith said that the airline is evaluating the aircraft and will be taking a decision in the very near future.

The announcement for two eight-year sale and leaseback contracts is the first deal from the RFP flydubai issued earlier this year seeking finance for all its aircraft deliveries in 2012.

“We have been overwhelmed with interest for our aircraft deliveries next year. We had many offers for each aircraft, which is an enviable position to be in, but having those options makes us confident that we have the right partner in MCAP,” Al Ghaith said.

“The rapid expansion we have enjoyed to-date will carry on throughout 2012 so we look forward to building our fleet to support this and serving more passengers across our network,” he said.

Once flydubai receive these aircraft, which are due off the Boeing production line in Seattle, US, in January and February 2012, the airline will have a fleet of 23 737-800NGs in less than three years of operation, he added.

Tatsuo Sato, chief executive officer of MCAP, said: “As a young company ourselves, we see many synergies with flydubai so we are pleased to have secured this contract, which enhances our relationship with the airline. We are now funding flydubai’s next three aircraft, which is an excellent achievement for us.”

The second announcement of the day was related to the budget carrier’s two new fleet Maintenance, Repair and Overhaul (MRO) contracts with Abu Dhabi Aircraft Technologies (ADAT), part of the Mubadala Aerospace MRO network, with a combined value of $54 million.

The primary agreement, for ICS (Integrated Component Support), covers the Repair Management and Forward Component Exchange and will see ADAT provide Total Material Support to flydubai’s entire fleet.

With a growing fleet, the contract allows flydubai to budget its maintenance spend in advance, while also having spare parts readily available. By outsourcing the maintenance and components support and management to ADAT, flydubai will benefit from reduced maintenance costs and increased capital liquidity, as a result of having to hold less spare parts, according to the airline.

This will create a saving of $35 million for the airline over the next five years. flydubai currently has 20 Boeing 737-800 NG aircraft with another 30 due to be delivered by the end of 2016, the carrier added. Commenting on this agreement Al Ghaith said: “At flydubai, we aim to make travel a little less complex, a little less stressful and a little less expensive. Signing this contract with ADAT has helped to minimise any maintenance-related delays, enhancing our on time performance. This reduces impact on our flying schedule, enabling passengers to reach their destination on time and in well maintained and safe aircraft, while maintaining our on time performance record, which is one of the best in the industry.”

Commenting on the partnership, which is supported by Sanad Aero Solutions (Sanad), Mubadala Aerospace’s component and engine financing solutions company, Group CEO of the Mubadala Aerospace MRO network, James Stewart said: “We are greatly looking forward to working closely with flydubai over the next five years and are delighted that ADAT’s dedication to its customers and investments in state-of-the-art facilities continue to make us the region’s MRO of choice, offering market leading maintenance solutions which help reduce the airlines’ costs and support increased liquidity.”

abdulbasit@khaleejtimes.com