Dubai-based LCC flydubai posted a 2019 first-half net loss of AED196.7 million ($53.6 million), narrowed from a net loss of AED316.8 million in the year-ago half on lower fuel prices and a reduction in capacity. Revenue was flat, at AED2.8 billion. 

Available seat kilometers (ASKs) fell 14.9%, compared to the year-ago half, and passenger numbers were down by 5 million, or 7.5%, thanks to the capacity cut. 

The airline said the ongoing grounding of the Boeing 737 MAX is having a significant impact on operations, warning that its operating fleet is set to reduce in size to 2014 levels and its performance would continue to be affected if the grounding continues to the end of the year. 

CEO Ghaith Al Ghaith said the LCC had been cautiously optimistic at the start of the year, as routes matured and demand strengthened across the network. “Our performance has, however, been significantly impacted by the grounding of the Boeing 737 MAX aircraft and our half-year results are not representative of what we had expected to report; we were expecting a significantly improved performance.”

Al Ghaith said: “In our 10th anniversary year, we had expected to grow our fleet and continue with our plans to expand our network. Without any deliveries of new aircraft and no visibility of the timelines, we will see our operating fleet reduce in size to what it was in 2014. This is disappointing.”

The airline is in ongoing discussions with Boeing over the grounding, he said, adding: “If the grounding continues until the end of the year, we expect our performance to continue to be impacted.” 

CFO Francois Oberholzer said steps taken to minimize cancellations and maximize revenue opportunities had led to a 14.9% reduction in ASKs, “which meant that we were not able to fully exploit demand opportunities.”

He added that cost-efficiency programs introduced at the beginning of the year had yielded planned benefits, with the exception of fuel efficiencies from the MAX deployment plan. “These programs were never intended, nor could have offset, the financial impact of the grounded Boeing 737 MAX aircraft.”

Flydubai retired five aircraft, returning them to their lessor, during the period. The carrier also took delivery of one 737 MAX 8 aircraft and, since March 13, has been maintaining 11 MAX 8s and three MAX 9s, which remain grounded.

According to Aviation Week Fleet Data Services, the airline has 234 MAX aircraft on order, including 101 MAX 8s, 42 MAX 9s and 91 MAX 10s currently scheduled for delivery between 2020 and 2028. Flydubai’s operating fleet comprises 23 owned and 20 leased 737-800NGs.

Looking ahead, flydubai said a further four aircraft would be retired from its fleet by the end of the year and it has been able to negotiate an extension to the lease for two Boeing 737-800 NG aircraft, which were scheduled to leave the fleet in 2020 and will now leave in 2022. 

Flydubai will continue to explore short- to medium-term leasing options, including ACMI, as it makes efforts to minimize passenger disruption.

Helen Massy-Beresford, helen.massy-beresford@aviationweek.co.uk