By Charlotte Seet
flydubai Records Major Loss Due to Pandemic
Based in Dubai, budget airline flydubai reported on Sunday May 2 a major loss of US$194 million last year, China News Asia reports, as its revenue fell by more than 50% in what the airline said was due to a plunge in passenger traffic as a result of the Covid-19 pandemic.
The loss was also a reflection of the closure of airports, the suspension of flights and the loss of tens of thousands of aviation jobs.
Flydubai’s net loss of US$194 million last year dulls in contrast to its profit of US$54 million the year before. Revenue slid by more than half to US$773 million last year compared to US$1.6 billion in 2019.
The company said the hardest weeks last year were between the end of March and the first week of July, a period in which even Dubai’s busy international airport was closed to all travelers as coronavirus cases rapidly rose worldwide.
As for the number of flights operated, flydubai reported a dramatic decrease of more than 60% due to the decline in passenger numbers, which plummeted from 9.6 million in 2019 to only just 3.2 million in 2020.
The company’s workforce shrank by 192 employees last year. Of the remaining 3,796 employees, nearly 1,100 have been put on unpaid or voluntary leave. Others have seen their salaries reduced.
Flydubai Chief Executive Officer Ghaith al-Ghaith said he recognises this “created some hardship.” but added such moves were necessary in order to maintain employment levels.
“The challenges we faced in 2020 meant that there were difficult decisions to be made,” he said.
The carrier said business improved in the second half of 2020 due to Dubai’s speedy reopening, as the Emirate works to lure back tourists and welcome people fleeing lockdowns in other countries.
“We would like to acknowledge the government’s response to the pandemic and the efforts that have been made to allow the travel and leisure sectors to reopen,” al-Ghaith said.
In addition to the impact of the pandemic, flydubai said its operations were affected by the nearly two-year-long grounding of its fleet of Boeing Max 737 aircraft.
While being operated by other carriers previously, the aircraft model was involved in two crashes that resulted in a total 346 fatalities, forcing Boeing to settle dozens of lawsuits filed by families of passengers killed, and for the Federal Aviation Authority to order the grounding of the aircraft model.
For twenty-two months, the 737Max was pending approval for a safe return to service. Flydubai had concluded its own interim settlement with Boeing for certain compensation in lieu of the aircraft groundings, but details of the agreement have been kept fairly confidential.
Flydubai currently has operations out of Dubai’s two airports, including Dubai International Airport – which is one of the world’s busiest for international travel – and has a fleet of 51 Boeing 737s.
The budget carrier also has a code-share with Dubai’s national carrier, Emirates Airline, but the two airlines operate independently.