Flydubai sways to profit boosted by agreement with Boeing 737 MAX grounding

Dubai

Flydubai, an United Arab Emirates carrier, swayed to a profit of 198.2 million dirhams in 2019, helped by a compensation agreement with Boeing over the worldwide 737 MAX grounding.

The Dubai state-owned airline is one of the world’s biggest MAX customers, though only around 14  of the jets were operated when they were grounded in March 2019.

Its fleet size shrank by more than a quarter to 45 jets last year as it retired older aircraft and new MAX jets were also grounded.
“We have had to manage a number of unprecedented issues faced by the aviation industry,” Chief Executive Ghaith Al-Ghaith said in a statement on Wednesday.

The airline has reached a confidential temporary settlement deal with Boeing over the grounding, and is in further talks over the impact of the grounding, he said.
“This agreement has contributed toward this year’s results, but in no way can it compensate for the loss of business opportunity or market share experienced by the airline.”

The revenue dropped to 2.6 percent to 6.2 billion dirhams, while direct operating costs fell down to 17.8 percent.

It carried 9.6 million passengers, which was fewer than the 11 million in the previous year.
“The preparation for this year’s outlook statement is challenging given the uncertainty around the timetable for the return to service of the Boeing 737 MAX aircraft and the subsequent aircraft delivery schedule,” Ghaith stated.
Flydubai leased some previous model 737 jets in the meantime.