The cooling of the global economy is in the air and the banks are reeling from softening commodity prices and equities being hit hard. But against that backdrop, most major airlines continue to report strong premium and economy traffic. Against this uncertain short term environment, one cannot help but think again about those aircraft lessors (and engine lessors) that have taken on stub leases at crazy rates – the buttons are already falling to the floor (on their shirts) that is for sure. In all this we do see some worrying trends, Latin American traffic and falling revenues on Transatlantic traffic for some major airlines is a worry but today thoughts turn to flydubai which posted AED100.7 million ($27million) net income for 2015, down 59.7% from its AED250 million net result in 2014. Revenue for 2015 came in at AED4.9 billion, up 11.4% year-on-year.
Flydubai is being hit hard by the strengthening US dollar as it took on eight 737-800s in 2015 – a trend that continues this year with delivery of 16 new aircraft in 2016/17 due, including five 737 MAX 8s due to arrive in Q4 2017. Flydubai may have to speed-up its plans to remove seven aircraft from its fleet and there will be an opportunity for some there.
The encouraging news was that the airline carried 9.04m passengers in 2015, up 24.9% year on year and with less flight disruptions in 2016 the airline’s new route network should lead a big upward swing in profits.