AIN Blog: Cooler Heads Prevail in Dubai
After low-cost, start-up airline Flydubai placed a nearly $4 billion order for Boeing 737-800s at the 2008 Farnborough Airshow, just as the global recession reared its ugly head, I penned a column questioning whether this and other blockbuster orders would ever come to fruition. Little did I know that more than three years later I would be dining with the airline’s leadership at Dubai’s Souk Al Bahar shopping complex, admiring the magnificent, 160-story Burj Khalifa and discussing 737NGs received and yet to come, new routes opened and cabins launched.
Flydubai has received 20 of the 50 original 737s ordered from Boeing—four others were to be leased—and was expecting its next delivery in December. All aircraft will be delivered by 2016. The government-owned carrier now serves 45 destinations, including Addis Ababa, Ethiopia; Yekaterinburg, Russia; Colombo, Sri Lanka, and Chittagong, Bangladesh. One-way fare to Chittagong from Dubai costs 460 Emirati Dirhams, or $125.
Being a start-up has enabled Flydubai to usher in some industry firsts. It was the launch customer for Boeing’s new 737NG Sky Interior, delivered in October 2010, and the Lumexis “fiber to the screen” (FTTS) in-flight entertainment system. The Dubai carrier models itself after another, older innovator—Southwest Airlines. Kenneth Gile, its chief operating officer, is a former Southwest pilot and director of flight operations, who gave it a go as president of now-defunct Skybus Airlines before joining Flydubai.
Having channeled skepticism over its ambitions in the past, I must confess that I accepted the dinner invitation from Flydubai with the thought that an announcement would be made regarding more aircraft, perhaps the improved 737 MAX, that we could report in AIN’s Dubai Airshow News. But there was no such announcement forthcoming at dinner, or at Flydubai’s official airshow press conference two days later. Instead, CEO Ghaith Al Ghaith unveiled three maintenance, repair and overhaul contracts worth $74 million—small change, indeed, after Emirates Airline ordered $18 billion in Boeing 777s.
“There has been much speculation about whether Flydubai would join the party this year and place another order for more aircraft, and there has been much speculation about whether the order will be for the 737 MAX or A320neo,” Al Ghaith told the crowded but deflated gathering. “…. I am pleased to say that I have three announcements to make today, but none of them is for aircraft orders. Flydubai already has a fleet of 20 aircraft and we have another 30 more aircraft for the next four years. We need to consolidate our operation and be sure the airline is running as efficiently and effectively as possible to stick to our goal of achieving profitability as soon as possible.”
Al Ghaith did hint at a future announcement regarding aircraft. But in a strange way, Flydubai’s anticlimactic news was reassuring. In an overheated industry, it seems that cooler heads for now have prevailed.