Flydubai posts Dh712.6m loss due to Covid-19, 737 MAX grounding
Ghaith Al Ghaith, CEO of flydubai, says Covid-19 has impacted us more than any other crisis.
Budget carrier flydubai on Sunday announced Dh712.6 million loss for 2020 as compared to Dh198.2 million profit in the previous year, hit by the Covid-19 and grounding of MAX 737.
It reported total annual revenue of Dh2.8 billion as compared to Dh6 billion in 2019; a decrease of 52.7 per cent
“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. The effects of the travel restrictions that were put in place to safeguard against transmission of the virus have heavily impacted the aviation industry,” said Ghaith Al Ghaith, CEO of flydubai.
He said: “The challenges we faced in 2020 meant that there were difficult decisions to be made. The priority however was to protect our employees. I fully recognise that in order to be able to achieve this our employees had to take periods of unpaid leave or work at reduced salary levels. I fully recognise that this created some hardship, but it has meant that we have been able to maintain employment levels,” he said, adding that “we managed the combined effects of the pandemic and continued grounding of the MAX aircraft on our operations, but undoubtedly they have had a severe impact on our results.”
During the course of the year, the airline completed two financing facilities amounting to Dh283 million for general corporate purposes. It carried 3.2 million passengers in 2020.
“During the course of last year, we adapted quickly to the changing situation and supported governments with their repatriation efforts helping them to make arrangements for their citizens to return home. We were also conscious of our role to contribute to the easing of the strain on the supply chain. We enabled the movement of essential goods across our network dedicating 11 aircraft for cargo operations at the peak of the pandemic,” said Hamad Obaidalla, Chief Commercial Officer at flydubai.
He said the airline achieved seat factor of 73 per cent in spite of the challenges.
Ghaith Al Ghaith the ongoing impact of the grounding of the MAX aircraft required airline’s engineering and maintenance team to put an active aircraft storage programme in place.
“The resulting 18 hours of maintenance per aircraft each week placed additional demands on their already extensive workload. We are grateful for their hard work and dedication which has ensured that the aircraft were meticulously preserved and ready to return to service in the best condition. The range and efficiency of the MAX aircraft would have been beneficial to exploring additional revenue opportunities during this challenging period,” he said.
Francois Oberholzer, Chief Financial Officer at flydubai, said during 2020, the airline optimised all possible revenue generating opportunities and it took early measures to control costs and preserve liquidity.
“We redoubled our efforts in cost improvement, deferred capital expenditure and raised new financing facilities. 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,” he said.
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