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Flydubai cancel flights due to plane groundings

Posted 30 September 2019 · Add Comment

Flydubai has said it will be cancelling up to 15 flights per day amid operational disruptions after the UAE grounded all Boeing 737 Max aircraft.

 

The low-budget airline said it will deploy its Next-Generation Boeing 737-800 aircraft instead to “minimise disruption to passengers.”

The airline also confirmed it has had to cancel some flights and is directly contacting passengers whose booking are affected.

Analyst Saj Ahmad said:  “The decline in revenue as well as passenger numbers in tandem with a reduction in capacity has negatively affected Flydubai’s results.The key takeaway is that while revenues were flat, it’s promising that they didn’t decline so clearly both demand and yield are holding up, despite flydubai not being able to capitalise on organic growth as a result of the 737 MAX fleet being stood down.

“Lower fuel costs too have helped Flydubai too – the sharp 17.3% decline has lowered expenditure while it’s flexible hedging strategy means that the airline isn’t locked into long term fuel pricing that could have adversely affected their bottom line. Flydubai traditionally has a stronger second half of the year – and while its not certain that the MAX fleet will resume operations this side of 2020, flydubai has managed to extended leases on existing 737-800s to offset any further capacity reduction for what is usually their more robust half of the year.”

Ahmad added: “As one of the biggest MAX customers, the grounding has severely dented Flydubai’s growth ambitions. With the deeper integration alongside Emirates at Terminal Three, Flydubai will turn the corner next year in a rapid way. The challenge will stem from not just getting the existing 737 MAXs ready for service, but a lot will depend on Boeing’s capabilities and resources in delivering the vast swathe of completed MAXs and restore production stability.

“Flydubai’s financial discipline, cost reduction efforts and well organised management team has helped navigate a very challenging few months.  There are plenty of positives to extract here – this performance is but a blip and certainly not created by the airline in respect of the MAX grounding. Flydubai has the mettle and structure to come through this in much better shape. Its fair to say that 12 months from now, Flydubai”s results will be completely different.”

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