Travel/Tourism
Fly Dubai Records 14.4% Passenger Growth
By Modupe Gbadeyanka
The management of Fly Dubai has announced its Full-Year Results for 2016 reporting a profit of $8.6 million.
It has also reported total revenue of $1.37 billion, an increase of 2.4 percent compared to the same period last year.
The stronger second half, driven by increased passenger numbers, was impacted by downward pressure on yield leading to lower overall revenue growth reflecting a continuation of the same adverse factors reported in the first half.
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of flydubai, said: “these results see flydubai report its fifth consecutive full-year of profitability.
In 2012, our third year of operation, we carried 5.1 million passengers. This year, we have carried 10.4 million passengers demonstrating that flydubai continues to help change the way both business and leisure passengers travel around the region.
An established tourism destination and global centre for business together with the UAE’s geographic location has supported the need for increased connectivity.”
Ghaith Al Ghaith, Chief Executive Officer (CEO) of flydubai, reviewing the Annual Results for 2016, commented: “Over the last two years we have seen passenger traffic grow cumulatively by 52 percent in terms of RPKM.
“We continue to demonstrate that we gain loyal customers across our network who recognise the benefits of direct air links and enjoy our onboard offering.
“The continuation of mainly lower fuel prices and ongoing cost management efforts are reflected in the 16% improvement in terms of ASKM [2] over the last two years. We have however seen a difficult pricing and operating environment.”
Cost and revenue performance
EBITDAR was healthy at 21.1% of revenue; an improvement from the previous year’s figure of 20.5%.
The closing cash and cash equivalents position, including pre-delivery payments for future aircraft deliveries, remained strong at AED 2.3 billion.
Fuel costs were 25% of operating costs compared to 30.6% in the previous year, against a backdrop of lower fuel prices for the year, with legacy fuel hedges impacting only 21% of the volume for full year 2016.
Ancillary revenue comprising of baggage, cargo and inflight sales contributed 13.8% of revenue; dropping from 15.1% from the previous year.
Operational performance
Aircraft deliveries: 8 Next-Generation Boeing 737-800 aircraft joined the fleet in 2016 in support of network expansion. The average age of the fleet was 3 years 8.5 months.
Business Class: The growth in the number of flydubai’s Business Class passengers continued and saw the airline carry 2.4 times the number of passengers as in 2014. The Subcontinent saw the strongest demand for Business Class carrying more than double the number of passengers. This was followed by the Caucasus which grew by 88%, as a result of a liberalisation of the visa rules, creating an increased demand from both inbound and outbound traffic flows. In addition, Business Class passengers grew by 38% in Europe and 24% in the GCC and Middle East.
Network expansion: During the course of the year, increased flight frequency on existing routes and a maturing in the performance of the 41 new routes launched in 2014 and 2015 saw ASKM grow by 9%.
The launch, on 29 November, of flights to the popular destination of Bangkok was the first route outside of the GCC to start operations with a double daily service. Across the network, flydubai reported the following passenger flows:
GCC & Middle East: flydubai carried 28% of all traffic between Dubai and the GCC and Middle East.
Europe: passenger numbers in Europe grew by 19%.
Russia: with 21 flights per week across 7 destinations passenger numbers increased by 3%.
Ukraine: overall flydubai passenger numbers on flights between Ukraine and Dubai increased by 26%.
Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan): its 5 points across the region saw flydubai contribute 23% of the total growth at Dubai airports.
Subcontinent: passenger numbers on the flydubai network grew by 22%.
Africa: passenger numbers from its 11 points grew by 3% and contributed 12% of the total growth at Dubai airports.
Al Maktoum International (DWC): flydubai has been operating from DWC since October 2015. With its two gateways, flydubai will continue to gradually increase its operations at DWC based on the further expansion of the airport.
Staff numbers: flydubai continued to grow its experienced team with a total of 3,773 staff including 746 pilots, 1,618 cabin crew and 282 engineers.
OPEN: flydubai launched its simple and straightforward rewards programme on 25 October 2016 and has been well received in the market.
Key Operating Figures
FZ981: following the tragic loss of FZ981 on 19 March 2016, flydubai remains focused on supporting the families who lost their loved ones. In addition to providing initial financial assistance payments and interim financial assistance payments, our Long Term Care Team continues to be available to the bereaved families who are our primary concern. Plans are being put in place for a memorial to mark the first year anniversary.
Ghaith Al Ghaith, CEO of flydubai, said: “flydubai continues, through its accredited representative, to support the investigation into the tragic accident. Our Long Term Family Assistance team continues to be available for all the families.”
Outlook
During 2017, flydubai will be the first airline in the Middle East to receive the new model Boeing 737 MAX 8 and the first of these aircraft will enter into service in the second half of the year. The overall capacity will not grow during 2017, as short term capacity needs are adjusted, due to the ongoing challenging operating environment. Since launch, one of the principles of flydubai’s fleet planning strategy was to maintain a young fleet. Under these plans, the airline will see the eight-year lease term expire for 4 Next-Generation Boeing 737-800 and during the year these aircraft will be retired from the fleet.
Ghaith Al Ghaith, CEO of flydubai, looking to the year ahead, said: “we will remain prudent throughout 2017 as we will continue to operate in a challenging socioeconomic environment. Yields will remain under pressure and we expect to report flat growth in the year ahead. We are looking forward to receiving the first Boeing 737 MAX 8 in the region which will bring further fuel and operating efficiency to our young modern fleet. We are focused on our strategy to lead in innovation, to provide an unrivalled experience on board and on the ground, as we continue to meet the travel demands of our passengers.”
By Modupe Gbadeyanka
The Chief Commercial Officer of Emirates, Mr Adnan Kazim, has said the airline’s forward bookings have remained robust amid a strong customer demand, spurring the company to ramp up its operations across continents.
According to him, in the past months, the airline has planned and executed the rapid growth of its network operations, reintroducing services to five cities, launching flights to one new destination (Tel Aviv), and adding 251 weekly flights onto existing routes and continuing the roll-out of service enhancements in the air and on the ground.
It was disclosed that Emirates has continued to scale up its A380 operations with the reintroduction of the iconic double-decker across its network: Glasgow (from 26 March), Casablanca from (15 April), Beijing (from 01 May), Shanghai (from 04 June), Nice (from 1 June), Birmingham (from 1 July), Kuala Lumpur (from 01 August), and Taipei (from 01 August).
“Emirates is working hard on several fronts – to bring back operating capacity as quickly as the ecosystem can manage while also upgrading our fleet and product to ensure our customers always enjoy the best possible Emirates experience.
“So far, four of our A380 aircraft have been completely refurbished with our new cabin interiors and Premium Economy seats, and more will enter service as our $2 billion cabin and service enhancement program picks up pace,” Mr Kazim added.
He noted that in the coming months, established routes to Europe, Australia and Africa would be served with more Emirates flights, while in East Asia, more cities are seeing route restarts.
Emirates had upcoming route enhancements by regions, including in Europe, Australia and New Zealand, East Asia, as well as in Africa which covers Cairo: from 25 to 28 weekly flights by 29 October; Dar es Salaam: from 5 flights a week to daily flights starting 01 May and Entebbe: from 6 flights a week to daily flights starting 01 July.
By Kestér Kenn Klomegâh
A number of African countries are focusing on promoting extensively inbound tourism. They are luring potential external investors to the tourism industry.
The latest in the southern African region is Mozambique, which has approved a visa exemption for 28 countries for tourism and business.
As the Council of Ministers approved the decree in mid-March, the exemption applies to visitors holding ordinary passports and allows for a 30-day stay, renewable to an additional 60 days.
The model adopted by the Mozambican government is similar to the United States visa waiver program in the sense that it requires travellers to register on a platform for pre-screening at least 48 hours before travelling and to pay a processing fee of MZN-650 (equivalent £8.50).
In the list released, Nigeria, which prides itself as the giant of Africa and the largest economy on the continent, was missing.
The approved countries for this programme are Belgium, Canada, China, Denmark, Finland, France, Germany, Ghana, Indonesia, Israel, Italy, Ivory Coast, Japan, The Netherlands, Norway, Portugal, Russia, Saudi Arabia, Senegal, Singapore, South Korea, Spain, Sweden, Switzerland, Ukraine, United Arab Emirates, the United Kingdom and the United States.
The visa exemption is a follow-up to the launch of a platform last December that allowed prospective visitors to apply for an electronic pre-authorization to travel into the country. The introduction of e-visas has seen an increase of over 30 per cent in the number of travellers entering the country compared to the same period in the previous year.
The e-visa platform commits the country to respond to applications within five days, but general feedback places an average response at 24 hours, and the few issues reported are usually created by users not uploading the required documentation.
President Filipe Jacinto Nyusi, since August 2022, has taken steps containing 20 reform measures aimed at delivering to visitors and potential investors a path for a more competitive and more accessible country. Mozambique, with an approximate population of 30 million, is one of the 16-member Southern African Development Community.
By Adedapo Adesanya
The International Air Transport Association (IATA) has said that foreign airlines’ blocked funds in Nigeria have risen to over $743.7 million.
In a letter dated March 14, 2023, and signed by the Area Manager for West and Central Africa, Dr Samson Fatokun, it was disclosed that the blocked funds rose from $549 million in December 2022 and $662 million in January to $743.7 million.
IATA noted that for over a year, Nigeria had been the country with the highest amount of airlines’ blocked funds in the world.
According to the association, the increasing backlog of international airlines’ blocked funds in Nigeria is a potential threat to foreign direct investment into the country and could affect the operations of airlines leading to job losses.
While appealing to the Minister of Aviation, Mr Hadi Sirika, to intervene in resolving the issues, the association also called on President Muhammadu Buhari to clear all airlines blocked funds before leaving office.
Meanwhile, at a meeting with the IATA and foreign airlines operators in Abuja to discuss the issues, Mr Sirika said the issue of blocked funds sits with the Central Bank of Nigeria and is not what the ministry can handle alone.
He urged international airline operators to be very considerate when dealing with the issues bearing in mind the effects of COVID-19 and the recession the country had experienced.
Recall that in August 2022, IATA’s Regional Vice-President for Africa and the Middle East, Mr Kamil Alawahdi, expressed his disappointment with Nigeria over the amount of airline money blocked from repatriation by the Nigerian government, which was around $464 million then.
“IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July.
“This is airline money, and its repatriation is protected by international agreements in which Nigeria participates. IATA’s many warnings that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market,” he said.
