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flydubai CEO Expects Difficult 2016

flydubai's chief executive expects another difficult year for the low-cost carrier as tough economic conditions put pressure on yields.

The airline this month reported a 60 percent drop in 2015 net profit to AED100.7 million dirhams, blaming a stronger US dollar and tough market conditions.

These factors pressured its overall yield and this is expected to continue in 2016.

"This is going to be a difficult year because of the overall economic outlook - there might be challenges with yield," said Ghaith al-Ghaith on the sidelines of a business conference on Thursday.

The UAE dirham is pegged to the US dollar, which has been trading recently at multi-year highs against a number of currencies, this strengthening makes tickets booked in other currencies comparatively more expensive.

Ghaith said the carrier was trying to boost traffic from its Dubai hub to CIS countries, even if there was less inbound traffic from those countries.

The yield in 2015 was also pressured by the airline's fuel hedging policy, which covered 41 percent of its fuel requirements.

Ghaith said the airline would continue to hedge fuel based on opportunities on contractual instruments. The carrier said in its 2015 results it had 16 percent of its fuel requirement hedged for the next 24 months.

(Reuters)