Flydubai added 19 destinations last year, including flights to east Europe and Central Asia. Karim Sahib / AFP
Flydubai added 19 destinations last year, including flights to east Europe and Central Asia. Karim Sahib / AFP

Flydubai loss widens on falling yields and rising costs



Flydubai, the Dubai-based budget carrier, on Monday reported deeper losses for the first half of 2017, as yields remain under pressure and fuel costs mount.

The Dubai Government-owned airline recorded a loss of Dh142.5 million for the first six months to the end of June, compared with a loss of Dh89.9m for the same period in 2016. Flydubai's first-half revenues however climbed to Dh2.5 billion, a 9.9 per cent year-on-year increase.

Yields - an indicator of profitability measured by revenue earned from a flying passenger per kilometre - are under pressure and profitability margins tightening for airlines across the Middle East and North Africa (Mena) as economic growth has slowed. Etihad reported a $1.87bn loss for 2016, while Emirates, the largest airline in the world by passenger traffic, reported an 82.5 per cent decline in annual earnings.

Demand for global travel, however, is picking up, the industry body Iata said in August, adding that some major global airlines have reported better passenger numbers and improved profitability.

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“Despite reporting a loss, flydubai has demonstrated some positivity in its earnings,” Saj Ahmad, the chief analyst at StrategicAero Research said, adding that the impact of higher regional capacity across all airlines has forced operators to slash fares, which has resulted in the erosion of yields and worsening margins.

The rise in revenues for the period, he noted, points to flydubai’s capacity to push down harder on costs despite the challenging price backdrop. “As with 2016, flydubai is primed to turn around its losses before its reporting year ends in early 2018,” he said.

Flydubai said that the demand for travel through Dubai was still intact, and that the carrier’s overall market share has grown.

"These factors have, however, been offset by the price performance determined by the market," the airline said. It added that its profitability was weighed down by "comparatively higher fuel expenses during the reporting period with fuel costs accounting for 24.8 per cent of operating costs, compared with 23.5 per cent in the previous reporting period".

Management of cost performance and balancing it with the carrier’s long-term view of the potential for air travel in the region will be focal points for flydubai, said the airline's chief executive Ghaith Al Ghaith.

“We know that we need to remain flexible to the market dynamics across our network. We will continue our disciplined approach to increasing capacity whilst pursuing our broader goal of firmly establishing flydubai at the centre of the global travel industry,” he added.

Despite the tougher operating environment, the airline's passenger numbers for the first six months of the year rose by 10.5 per cent to 5.4 million. The number of passengers carried per departure also climbed by 13.7 per cent for the same period. The closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, remained robust at Dh2.1bn.

While full-service airlines remain cautious about route expansion, flydubai said it will expand its route network in Russia to 10 destinations. The airline, which is building a new headquarters in the emirate, is also set to take delivery of six Boeing 737 MAX 8 aircraft by December, which it says will give it greater flexibility, reliability and efficiency.

Marathon results

Men:

1. Titus Ekiru(KEN) 2:06:13 

2. Alphonce Simbu(TAN) 2:07:50 

3. Reuben Kipyego(KEN) 2:08:25 

4. Abel Kirui(KEN) 2:08:46 

5. Felix Kemutai(KEN) 2:10:48  

Women:

1. Judith Korir(KEN) 2:22:30 

2. Eunice Chumba(BHR) 2:26:01 

3. Immaculate Chemutai(UGA) 2:28:30 

4. Abebech Bekele(ETH) 2:29:43 

5. Aleksandra Morozova(RUS) 2:33:01  

SPECS: Polestar 3

Engine: Long-range dual motor with 400V battery
Power: 360kW / 483bhp
Torque: 840Nm
Transmission: Single-speed automatic
Max touring range: 628km
0-100km/h: 4.7sec
Top speed: 210kph
Price: From Dh360,000
On sale: September

Specs

Power train: 4.0-litre twin-turbo V8 and synchronous electric motor
Max power: 800hp
Max torque: 950Nm
Transmission: Eight-speed auto
Battery: 25.7kWh lithium-ion
0-100km/h: 3.4sec
0-200km/h: 11.4sec
Top speed: 312km/h
Max electric-only range: 60km (claimed)
On sale: Q3
Price: From Dh1.2m (estimate)

MEDIEVIL (1998)

Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Illegal shipments intercepted in Gulf region

The Royal Navy raid is the latest in a series of successful interceptions of drugs and arms in the Gulf

May 11: US coastguard recovers $80 million heroin haul from fishing vessel in Gulf of Oman

May 8: US coastguard vessel USCGC Glen Harris seizes heroin and meth worth more than $30 million from a fishing boat

March 2: Anti-tank guided missiles and missile components seized by HMS Lancaster from a small boat travelling from Iran

October 9, 2022: Royal Navy frigate HMS Montrose recovers drugs worth $17.8 million from a dhow in Arabian Sea

September 27, 2022: US Naval Forces Central Command reports a find of 2.4 tonnes of heroin on board fishing boat in Gulf of Oman 

'My Son'

Director: Christian Carion

Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis

Rating: 2/5

COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now

COMPANY PROFILE

Name: Mamo

Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua

Based: Dubai, UAE

Number of employees: 28

Sector: Financial services

Investment: $9.5m

Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors.

BUNDESLIGA FIXTURES

(All games 4-3pm kick UAE time) Bayern Munich v Augsburg, Borussia Dortmund v Bayer Leverkusen, Hoffenheim v Hertha Berlin, Wolfsburg v Mainz , Eintracht Frankfurt v Freiburg, Union Berlin v RB Leipzig, Cologne v Schalke , Werder Bremen v Borussia Monchengladbach, Stuttgart v Arminia Bielefeld

UAE athletes heading to Paris 2024

Equestrian
Abdullah Humaid Al Muhairi, Abdullah Al Marri, Omar Al Marzooqi, Salem Al Suwaidi, and Ali Al Karbi (four to be selected).
Judo
Men: Narmandakh Bayanmunkh (66kg), Nugzari Tatalashvili (81kg), Aram Grigorian (90kg), Dzhafar Kostoev (100kg), Magomedomar Magomedomarov (+100kg); women's Khorloodoi Bishrelt (52kg).

Cycling
Safia Al Sayegh (women's road race).

Swimming
Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics
Maryam Mohammed Al Farsi (women's 100 metres).

Company profile

Company: Zywa
Started: 2021
Founders: Nuha Hashem and Alok Kumar
Based: UAE
Industry: FinTech
Funding size: $3m
Company valuation: $30m

The currency conundrum

Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”

Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.

This is a race to the bottom, and everybody wants to be a winner.

Honeymoonish

Director: Elie El Samaan

Starring: Nour Al Ghandour, Mahmoud Boushahri

Rating: 3/5

Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Diriyah project at a glance

- Diriyah’s 1.9km King Salman Boulevard, a Parisian Champs-Elysees-inspired avenue, is scheduled for completion in 2028
- The Royal Diriyah Opera House is expected to be completed in four years
- Diriyah’s first of 42 hotels, the Bab Samhan hotel, will open in the first quarter of 2024
- On completion in 2030, the Diriyah project is forecast to accommodate more than 100,000 people
- The $63.2 billion Diriyah project will contribute $7.2 billion to the kingdom’s GDP
- It will create more than 178,000 jobs and aims to attract more than 50 million visits a year
- About 2,000 people work for the Diriyah Company, with more than 86 per cent being Saudi citizens

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez

Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.


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