Flydubai swings to profit as travel industry rebounds and economic recovery picks up

The airline swung to a $229m profit in 2021 after posting a $194m loss a year earlier

Flydubai's annual revenue grew 86 per cent to Dh5.3 billion last year. Photo: Wam

Flydubai, the sister airline of Emirates, swung to profit in 2021, as passenger numbers grew on the back of the easing of travel restrictions and improving economic conditions worldwide.

The airline posted a Dh841 million ($229m) profit in 2021, compared with a Dh712.6m loss in 2020, when the travel industry was hit hard by the Covid-19 pandemic.

Annual revenue grew 86 per cent to Dh5.3 billion last year as passenger numbers rose 76 per cent to 5.6 million, flydubai said on Monday.

“The tremendous results flydubai is reporting for 2021 come after a very challenging two years as a result of the Covid-19 pandemic,” said chairman Sheikh Ahmed bin Saeed.

“The decisions taken by the UAE’s leadership, which saw the implementation of the precautionary safety measures throughout the customer journey, gave visitors the confidence to travel to Dubai; resulting in a 76 per cent year-on-year increase in passenger numbers.

“We remain well placed to continue to welcome passengers across our network to Dubai and beyond, flydubai is intrinsic to Dubai’s travel and tourism industry.”

The number of flights surpassed pre-pandemic levels in December 2021, when the airline operated 6,430 flights, compared with 5,701 flights in January 2020.

Flydubai launched 22 new routes in 2021, 13 of which were unserved destinations from Dubai.

The top 10 busiest routes for scheduled flights were Alexandria, Bahrain, Bucharest, Doha, Karachi, Kathmandu, Male, Tbilisi, Tel Aviv and Zanzibar.

It also flew to five additional destinations in summer to meet demand on the routes.

“A challenge that remained throughout 2021 was the constant changes to the travel restrictions. This meant that passengers did not have the confidence to book travel early. However, they continued to travel with a shorter booking window ahead of their date of travel,” said chief executive Ghaith Al Ghaith.

“During the second half of the year, travel restrictions began to ease, which led to an increase in demand for travel across our network. We launched flights to seasonal summer destinations to offer more options for passengers, and the increase in our flight schedule in the second half of the year supported the demand for inbound travel to Dubai.”

Dubai hosted 7.28 million international overnight visitors between January and December 2021, up 32 per cent a year, according to Dubai’s Department of Economy and Tourism.

International visitors to the emirate crossed 3.4 million in the fourth quarter of 2021, which was 74 per cent of the total tourist arrivals in the same period in 2019.

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  Dubai's post-pandemic boom has made it one of the most visited places in the world today. Further to that, the city has seen tens of thousands of new residents arrive to settle down. Reuters

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  Between late 2020 and spring 2022, the city's population grew by close to 100,000 people. Karim Sahib / AFP

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  Lifestyle and a growing jobs market has attracted many residents to flashy communities such as Jumeirah Beach Residence. Reuters

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  Population growth is a major part of Dubai's 2040 Urban Plan, which seeks to boost the population to 5.8 million. Chris Whiteoak / The National

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  There are plans to physically expand Dubai, creating new beaches and parks for the larger population. The government wants 60 per cent of the city to be green parks and reserves. Photo: Dubai Media Office

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  The past two years have \seen a rush of foreign investors looking to buy new property in places such as Palm Jumeirah, where prices have risen significantly. AP Photo / Kamran Jebreili

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  Landmarks such as Bluewaters Island and Ain Dubai, the world’s largest observation wheel, have put Dubai on the map as a global lifestyle destination. Reuters

Flydubai expanded its fleet last year to 59 aircraft, including 34 Boeing 737-800 planes, 22 Boeing 737 Max 8 jets and three Max 9s.

The Max rejoined the airline’s fleet in April after the UAE lifted a 23-month safety ban on the jet in February 2021.

In July, the airline also reached an agreement with Boeing to reduce its orders placed in 2013 and 2017 by 65 aircraft.

Flydubai had received 25 aircraft as of December 31, with another 161 aircraft due for delivery. From March 2022, flydubai will take delivery of 20 jets from the 737 Max 8 family, which will be used across the network to “support the airline’s future growth”, the airline said.

Last year, flydubai completed the financing requirements for 13 Max aircraft and two Leap-1B engines by sale and leaseback to support aircraft deliveries.

“During 2022, we will see the largest number of aircraft delivered in any year since the launch of the airline. As the momentum for travel continues to build, we will increase frequencies and introduce new destinations on our network during 2022. To support this growth trajectory, we will need to recruit the best people in the industry,” Mr Al Ghaith said.

The airline plans to hire 900 more employees in 2022, including cabin crew, pilots and engineers, as it increases capacity, he told The National at the Dubai Airshow last year.

Global passenger traffic is on track to rebound to pre-pandemic levels by 2024, with the outlook unchanged by the Omicron coronavirus variant, but the Russia-Ukraine conflict poses near-term risks, the International Air Transport Association said last week.

The number of travellers is expected to reach four billion in 2024, more than double the number recorded in 2019, before the onset of the pandemic, the industry body said.

“With the lifting of restrictions across our network and increasing demand for travel, we are cautiously optimistic about the year ahead notwithstanding the geopolitical situation and its potential effect on the pricing of commodities,” Mr Ghaith said.