FlyDubai has blamed the Boeing 737 MAX grounding on the financial downfall it has witnessed in its latest H1 2019 financial results.
The airline suffered a loss of AED 196.7 million (approximately $53.6 million), marking a 38% reduction when compared to the first half of 2018.
The grounding "significantly impacted" its latest results, however, the airline has stressed that it is committed to minimising disruption to its passengers.
Total revenue remains unchanged from the same six-month period and is reported at AED 2.8 billion ($759 million).
Ghaith Al Ghaith, chief executive officer at Flydubai, said: “We had reported in our 2018 Full-Year Results that we were cautiously optimistic at the start of 2019.
"We had seen positive results as our routes matured and during the first few months of the year we saw strong demand 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.”
Fuel costs were reported at AED 740 million; compared to AED 895 million for the same period as in 2018, a decrease of 17.3%. This was due to the benefit of lower fuel prices and reduced ASKM, the airline said. The full potential saving has not been realised due to the deployment of the Next-Generation Boeing 737-800 aircraft on our longer routes.
During the first six months of the year, Flydubai retired five aircraft and they were returned to the lessor. The airline took delivery of one Boeing 737 MAX 8 aircraft. Since 13 March, flydubai continues to maintain 11 Boeing 737 MAX 8 and three Boeing 737 MAX 9 aircraft which remain grounded.
Francois Oberholzer, Chief Financial Officer at flydubai, said: “in light of the grounding we have taken every effort to minimise flight cancellations and maximise revenue opportunities. Unavoidably, this led to a reduction in ASKM by 14.9% which meant that we were not able to fully exploit demand opportunities. The cost efficiency programmes, we introduced at the beginning of the year, have yielded the planned benefits with the exception of the fuel efficiencies from the MAX deployment plan. These programmes were never intended nor could have offset the financial impact of the grounded Boeing 737 MAX aircraft.”
During the first half of 2019, flydubai launched flights to Kozhikode in India, Tashkent in Uzbekistan, Naples in Italy and Sochi in Russia bringing the total number of destinations on its network to 92 destinations in 48 countries.