Could Flydubai Be Front of the Queue for Boeing 737 MAX?

Dubai Air Show » 2011
November 14, 2011, 9:10 AM

With its rapidly growing route network, long-term expansion plans and emphasis on reduced operating costs, flydubai has to be considered a prime sales prospect for Boeing’s re-engined 737 MAX airliner. The low-cost carrier has held talks with the U.S. airframer about the new design but, for the time being, has not indicated whether it will place an order for it.

To date, flydubai has taken delivery of 20 of the 50 existing 737-800s that it ordered back in July 2008, and it is due to receive the remaining 30 between now and 2016. The 737 MAX is due to go into production in 2017.

Flydubai CEO Ghaith Al Ghaith told AIN that the reduced maintenance and training costs associated with operating a single aircraft type are at the core of the carrier’s business model. On this basis, he indicated that the company has no plans to look beyond Boeing for future fleet requirements.

“We placed an order worth $4 billion at the 2008 Farnborough airshow for 50 Boeing 737-800 NG aircraft. So far we have taken delivery of 20, with the remainder due before the end of 2016,” he said. “We always maintain a young fleet and this means that we can keep them flying longer and avoid breakdowns. We have one of the highest aircraft utilization rates in the industry, with each aircraft averaging 13 to 16 hours a day.”

Route Expansion Plans

The airline’s route expansion strategy is “simple,” said Al Ghaith, “we provide a low-cost alternative to popular routes such as Beirut as well as those previously underserved by direct air links such as Ashgabat, Turkmenistan. We also target destinations that did not previously have international flights such as Abha, Gassim and Yanbu in [Saudi Arabia] and those in which flydubai is the first [LCC] to start operations such as Addis Ababa, Yerevan and Baku.” We are also looking to expand further within Central and Eastern Europe, the subcontinent and increase the frequency of flights within the GCC,” Al Ghaith added.

Today flydubai’s route map that covers 46 destinations across the Middle East, Indian subcontinent, Africa and Central and Eastern Europe. It also claims to have the most extensive route in the Gulf Cooperation Council states.

“We have become the world’s fastest growing start-up airline ever and is the second largest carrier operating out of Dubai International Airport [after Emirates]…From June 2010 to May 2011, we recorded increases of 161 percent for ASKs [available seat-kilometers] and 181 percent for RPKs [revenue-passenger kilometers] over the previous 12 months.”

Al Ghaith believes that the low-cost model has a big future in the region. “The Middle East’s LCCs currently account for only seven percent of the total passenger traffic, compared to 35 percent in Europe, so there is great potential for growth.”

And the challenges going forward? “Over the next five years we will take delivery of 30 aircraft, which means we will require hundreds more pilots to keep pace with this very rapid expansion.” This and fuel costs are major challenges: “In the current environment, we also have to be prepared for fluctuating fuel costs. It is the largest single cost we have and we must factor this into our future planning.”

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