Flydubai yesterday said it swung to a loss of Dh147.4 million in the first half of the year amid lower Russian demand, and the suspension of flights to Iraq, Yemen and parts of Ukraine.
The strengthening of the US dollar in the past year also weighed on the airline’s profitability.
Flydubai, also known as Dubai Aviation Corp, posted a profit of Dh53.1m in the first half of2014.
The company did not mention its third-quarter results in a financial statement posted on Nasdaq Dubai.
“Expanded military activity in the north of Iraq has disrupted the company’s operations and saw flights to Erbil suspended at the beginning of the year, restarting towards the middle of the year and flights to Sulaimaniyah remain suspended,” said flydubai.
The carrier also said traffic flows on Russian routes had declined because of that country’s economic downturn. Russia, one of the world’s largest producers of hydrocarbons, has been hit by the oil price slump since last year, and visits to the UAE by Russians and people from the former Soviet satellite states have declined as a result of the Russian rouble’s devaluation.
Conflicts in Ukraine and Yemen have also taken a toll on flydubai, as flights to Aden, Sanaa and Ukraine – with the exception of Kiev and Odessa – remain suspended. These flight disruptions have also affected the wider flight network.
“Due to the limitations of Yemeni airspace for commercial flights, the flight paths to some of the African destinations have changed, resulting in increased flight times and payload restrictions,” said the airline.
Despite the drop in profits, Flydubai said its revenue, including operating income, rose 8.7 per cent in the first half of the year to Dh2.2 billion from the same period last year.
It said revenue growth was subdued despite the 33.6 per cent increase in the airline’s flight capacity because of greater competition in mature markets and the appreciation of the US dollar, especially against emerging-markets currencies.
Even though flydubai is experiencing difficulties with some of its flight routes, it is pushing ahead with expansion. The airline said in August that it would increase flights from Al Maktoum International Airport from next Sunday.
Flydubai said it would operate flights to Amman, Beirut, Chittagong, Doha, Kathmandu, Kuwait and Muscat from the airport, while also continuing to fly to those destinations from Dubai International Airport.
Ghaith Al Ghaith, flydubai’s chief executive, said in August that the expansion of its routes would provide opportunities for growth as the airline takes delivery of more than 100 new Boeing aircraft by 2023.
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