Low-cost airline anticipates profit amid ‘never seen before’ surge in passenger demand, Ghaith Al Ghaith says
Flydubai, the sister airline of Emirates, expects to record double-digit operational growth next year as air travel demand surges to unprecedented levels following the Covid-19 pandemic, its chief executive said.
The low-cost airline is currently more than 80 per cent larger than its overall pre-pandemic size in 2019 in terms of the number of aircraft, destinations, employees and passenger traffic, Ghaith Al Ghaith, Flydubai’s boss, said at a media briefing on Thursday.
The airline currently operates a fleet of 71 Boeing 737 Max aircraft to 114 destinations globally with a workforce of more than 4,650 employees.
“Demand is out of this world, we’ve never seen such demand, and this is why we’re very optimistic,” Mr Al Ghaith said. “Next year will also be very good demand-wise, and I think this momentum will continue also in 2024.”
He cited growth factors including the UAE government’s management of the pandemic, the impact of hosting Expo 2020 Dubai and the regional spillover from the Fifa World Cup in Qatar. New visa schemes introduced by the government are also making it easier for more people to live, work and retire in Dubai, he added.
The global exposure from such mega events continues to attract a flow of new business and travellers to the region even in their aftermath, Mr Al Ghaith said.
Flydubai expects to turn a profit in 2022 amid strong travel demand and a tight rein on costs, its chief executive said. The airline posted a Dh841 million ($229 million) profit in 2021, compared with a Dh712.6 million loss in 2020, as travel restrictions eased and economic conditions improved globally.
‘Biggest recruitment drive’
Flydubai is stepping up operations to meet growth in passenger demand with an expanding fleet, network and workforce.
In 2022, it took delivery of 20 new Boeing 737 Max aircraft and grew its network to 114 destinations.
To support this growth, it has hired more than 1,300 new employees since the start of this year, 80 per cent of whom are cabin crew, engineers and pilots, creating a workforce of more than 4,650 people.
This marks the biggest recruitment drive that the airline has undertaken.
Plans to further grow its workforce are currently under way and will continue throughout next year, the airline said.
In 2023, the airline will take delivery of 17 new 737 Max aircraft and plans to add seven new routes to its network.
These include flights to Cagliari in Sardinia, Corfu in Greece, Gan in the Maldives, Krabi and Pattaya in Thailand, Milan Bergamo in Italy and St Petersburg in Russia.
The airline could announce more destinations in addition to these seven routes depending on market conditions, Mr Al Ghaith said.
Pent-up demand for travel will weather higher inflation rates that are biting into consumer spending, the airline’s chief said.
“I don’t think it will hurt demand, I can guarantee that until the summer for sure demand will be very strong and I think the rest of the year will be very strong,” Mr Al Ghaith said.
The airline is constantly looking into financing options, he said when asked about the requirement to raise funds for jet deliveries next year.
There is a “very unfavourable increase” in interest rates in the market, which is a “small concern” because of higher borrowing costs for the industry, Mr Al Ghaith said.
However, the availability and pricing of funding for Flydubai have been at their best levels due to market confidence in the company, he said.
The central banks of the UAE, Saudi Arabia, Bahrain and Qatar raised their benchmark borrowing rates after the US Federal Reserve increased its key interest rate for the seventh time this year to restore price stability and tame inflation that hit a four-decade high.
Asked about higher jet fuel prices, Mr Al Ghaith said this was the airline industry’s “biggest challenge” and the focus was on adjusting prices accordingly.
Mr Al Ghaith also called for greater intervention by governments and other stakeholders globally to increase the supply of sustainable aviation fuels (SAF) for airlines to use. SAF has been touted as a near-term solution for the global airline industry to reduce its carbon footprint on the journey to net-zero by 2050.
Flydubai operated 1,290 flights between Dubai World Central (DWC) and Doha International Airport (DIA) to carry more than 130,000 football fans to the World Cup in Qatar between November 21 and December 19.
Load factors on Flydubai’s shuttles reached about 60 per cent, exceeding the airline’s own expectations of 50 per cent, Mr Al Ghaith said.
After Qatar Airways, Flydubai ranked second in terms of the number of match-day flight shuttles to Doha by Gulf carriers, he said.
“We created in this operation, a very unique, seamless travel [experience] that made it so easy for people to go to the World Cup and come back, it was like a dream,” Mr Al Ghaith said.
Passengers from 171 countries travelled to Doha on Flydubai’s match-day shuttle flights.
The top 10 nationalities in terms of passengers were the UK, India, UAE, France, Argentina, US, Morocco, Jordan, Canada and Brazil who made up to 60 per cent of the overall number travelling on these shuttle flights.
Flydubai operated up to 30 daily return shuttle flights between DWC and Doha, with a shuttle flight departing every 30 minutes during peak travel periods.
These flights were operated by seven of the carrier’s Boeing 737 aircraft which were temporarily used by DWC for the duration of the tournament.