Statements on the 2018 Annual Results

Ghaith Al Ghaith, Chief Executive Officer of flydubai, said: “In line with expectations 2018 was a challenging year however we have continued to invest in our capacity and increased revenue.  We optimised our network by increasing flight frequencies on existing routes and adding new routes and as they become established they will support our further growth.” 

Francois Oberholzer, Chief Financial Officer of flydubai, said: “Our performance in 2018 was impacted largely due to increasing fuel costs, rising interest rates and unfavourable currency exchange movements.  Following our Half-Year Results, we continued to focus on further efficiency programmes across the business and these have resulted in a better second half.  The emphasis we have put on these programmes is expected to result in an improvement to our financial performance.”

Cost and revenue performance

• EBITDAR (1) was reported at 21.1% of annual revenue.
• Closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, is AED 2.1 billion compared to AED 2.4 billion last year.
• Fuel costs were 29.8 % of total annual operating costs; compared to 25% for the same period as last year.  Rising fuel costs have impacted performance and this is reflected by the proportionately higher increase in total operating costs compared to capacity increase. Total operating cost includes a price impact of AED 411 million (USD 112 million) due to a 31% increase in the Average Brent Crude Oil prices over the same period last year.
• Yield: there was an improvement in yield by 8.4% over the same period in the previous year. Volatility in fuel prices coupled with global geo-political developments and its effect on demand for international air travel is expected to keep some pressure on yields and passenger numbers in the near to-medium term.
• Ancillary revenue comprising baggage, cargo and inflight sales contributed 9.4% of revenue compared to 11.9% last year. Fare bundling has contributed to overall revenue growth but is reflected in the lower contribution to ancillary revenue.
• Financing: During 2018, the airline closed two financing structures to support the delivery of four Boeing 737 MAX 8 aircraft and three Boeing 737 MAX 9 aircraft through the Japanese Operating Lease with a Call Option (JOLCO) as well as sale and leaseback structure. The airline continues to see strong appetite for the financing of this fuel efficient narrow-body aircraft. It expects to continue to finance future deliveries using the structures presently available as well as new financing structures at competitive pricing levels that support the requirements of the airline.

In addition, flydubai has also secured a financing facility through a consortium of commercial banks with a tenure of 10 years to support the construction of its new headquarters due for completion in the first half of 2020.

Operational performance

• Fleet management: in line with its ongoing fleet management programme seven Boeing 737 MAX 8 and MAX 9 aircraft were delivered to the airline and four Next-Generation Boeing 737-800 aircraft, at the end of their operating lease, were taken out of service.
• Sustained network expansion: flydubai launched flights to four new markets and for the first time saw the start of year-round operations to Catania, Helsinki and Krakow as well as a summer seasonal operation to Dubrovnik. As a result of strong demand in previous years, flydubai operated a number of flights to seasonal summer destinations including Batumi and Tivat.
• flydubai contributed 31% of the total growth at Dubai Airports for Europe, contributing 6% of overall traffic to the region, up by 1% from the same period last year. 
• flydubai increased the number of passengers carried from Bulgaria by 56%, from Romania by 45%, from Russia by 42%, from Serbia by 35% and Ukraine by 2%.
• flydubai accounted for 43% of the increase in passengers travelling between Dubai and Russia and the airline’s share of the whole market between Dubai and Russia was 23.8% in 2018; up by 3.7% from the previous year.
• flydubai increased the number of passengers carried from five points on its network in Pakistan by 13%. The airline’s share of the whole market between Dubai and Pakistan is up to 24.2% and in 2018 the airline carried over 1 million passengers. 
• flydubai increased the number of passengers carried from Bahrain by 14%, from Kuwait by 6% and from Oman by 4%.
• flydubai’s share of the whole market between Dubai and India remained steady at 4%.
• Business Class passengers increased from Africa by 49%, from the Caucasus from 78% and Europe by 30%.
• Terminal 3: flydubai started operations to 11 destinations at Terminal 3, Dubai International as a next step in the codeshare partnership with Emirates to optimise connectivity for passengers.