flydubai's financial results for the year ended December 31, 2019 turned into profitability with a profit of 198.2 million dirhams.
According to the newspaper, the carrier recorded revenue of 6 billion dirhams, compared to returns of 6.2 billion in 2018, a decrease of 2.6%. The carrier has completed a temporary settlement agreement with Boeing 737 MAX compensation.
The airline carried 9.6 million passengers over the past year.
Ghaith Al Ghaith, CEO of flydubai, said: "During the year we dealt with a number of unprecedented issues facing the aviation sector. Our results show that we have benefited from the strong foundations we have built, but unfortunately our growth strategy has been greatly influenced by the suspension of Boeing 737 MAX aircraft.
He added: Although the year 2019 witnessed our return to profitability, this did not compensate for the decline in our market share and the opportunities that the carrier was seeking. Regarding the temporary settlement with Boeing, Ghaith Al Ghaith said: We have concluded a temporary settlement agreement with Boeing to obtain certain compensation due to the suspension of work of the fleet of Dubai Boeing 737 Max aircraft.
The details of the interim settlement agreement are kept confidential. This agreement contributed to achieving these results for this year, but it can in no way compensate for the loss of opportunities or market share affected by the carrier. We are in contact with Boeing about the impact of the continued suspension of Max aircraft.
"Flydubai has dealt with great flexibility with the changes and the effects of this on our growth and fleet strategy in general," said Francois Oberholz, CFO at flydubai. We have maintained strong cohesion in our business with the uncertainty arising from the suspension of Max aircraft.
Direct operating expenses decreased by 17.8%, while income witnessed two-digit growth, which led to a 2.6% decrease in revenue, with capacity declining by 15.8%, and we succeeded this year in refinancing the Sukuk that we issued in 2014.
Revenue before taxes and fees recorded a growth of 29.5% compared to 21.1% in 2018, and for cash and cash equivalents, they included advance payments before receiving the aircraft, and reached 2.6 billion dirhams, compared with 2.1 billion in the previous year.
Fuel costs accounted for 25.8% of total annual operating expenses, due to the decline in Brent crude prices by 9%. The expected benefits of this matter from the 737 MAX were not realized due to the continued suspension of these aircraft.
As for the additional revenue, it includes bags fees, freight and sales on the flights, and contributed 8.9% of the total revenue, compared to 9.4% in the previous year.
As for financing, the carrier got ...
