Flydubai narrows H1 loss but warns of pressure from MAX grounding

A Boeing 737 MAX aircraft bearing the logo of Flydubai is parked at a Boeing production facility in Washington. (Reuters/File)
Updated 01 October 2019

Flydubai narrows H1 loss but warns of pressure from MAX grounding

  • Flydubai is one of the world’s biggest MAX customers with 14 planes from an order of 250

DUBAI: Flydubai warned on Monday of significant financial pressure from the unprecedented grounding of the Boeing 737 MAX as it reported a 196.7 million dirhams ($53.6 million) first-half loss.

The Dubai state-owned airline, one of the world’s biggest MAX customers with 14 planes from an order of 250, said it expected its fleet to shrink this year as it was unable to replace older aircraft.

Flydubai has largely stood by Boeing, which is facing one of the worst crises in its history, though the airline’s chairman said in April it could order jets from rival Airbus as replacements.

“We are in ongoing discussions with Boeing, as our long-standing partner, to resolve the unprecedented nature of this grounding and the significant impact it has had on our business and growth strategy,” CEO Ghaith Al-Ghaith said in a statement.

The airline expects to have a fleet of 43 aircraft by the end of the year, fewer than the 62 it thought it would have prior to the grounding. Boeing’s top-selling jet was grounded worldwide in March following two fatal crashes in Ethiopia and Indonesia that killed 346 people within a span of five months.

Flydubai’s first-half loss was narrower than the 316.8 million dirhams it lost a year earlier, while the number of passengers carried was down 7.5 percent to 5 million.

The airline had previously said it expected to return to profitability this year after losing 160 million dirhams in 2018.

A cost efficiency program introduced at the start of the year had offset some of the impact of the MAX grounding, although it would not be able to fully cover it, it said.

“If the grounding continues until the end of the year, we expect our performance to continue to be impacted,” Ghaith said.

Flydubai said it had seen strong demand on its network at the start of the year.


Saudi Arabia promotes investment opportunities with Japan’s business leaders  

Updated 23 October 2019

Saudi Arabia promotes investment opportunities with Japan’s business leaders  

  • Saudi Arabia and Japan exchanged 12 MoUs in the fields of education, science, technology, and banking and finance

DUBAI: Saudi Arabia opened its doors for Japanese investment during a Saudi-Japan business forum held in Tokyo on Wednesday amid growing economic ties between the two nations.  

The Saudi Arabian General Investment Authority (SAGIA) discussed tourism and entertainment investment opportunities in Saudi Arabia with Japan’s business leaders and government officials during the Saudi-Japan Vision 2030 Business Forum, hosted in partnership with the Japan External Trade Organization (JETRO).

During the forum, 12 Memoranda of Understanding (MoU) were exchanged in fields of education, science, technology, and banking and finance.

The MoUs include Toyobo and Saline Water Conversion Corporation and Arabian Japanese Membrane Company which will aim to manage disposed brine water generated from seawater desalination plants for environmental sustainability.

Two Saudi and Japanese universities signed MoUs for academic exchange on research. While SAGIA signed MoU with Sumitomo Mitsui Banking Corporation to enhance investment opportunities.

“Japan is one of Saudi Arabia’s most important economic partners, and businesses from across our countries have a strong track record of working together,” Saudi Arabia’s Minister of Commerce and Investment, Majid Al-Qasabi said at the Forum.

“Today’s Forum reflects the success and strength of this enduring partnership. We established the Saudi-Japanese Vision 2030 two years ago, which seeks to drive and facilitate continued private sector involvement by establishing joint-ventures between entities across our respective countries,” he added.

These investments come alongside a broad series of economic reforms, which are enabling rapid growth in foreign investment in Saudi Arabia. This is part of the Kingdom’s efforts to diversify its economy as outlined in Vision 2030.

Saudi Arabia has moved up three positions to the 36th place, globally, through its efforts to diversify the Kingdom’s economy, according to the 2019 Global Competitiveness Report published by the World Economic Forum.

The total number of foreign investor licenses issued in the first half of 2019 was more than double the number issued the same period a year before.

“We believe that the future prosperity of the Kingdom depends on fostering even closer ties with our strategic partners across the globe, and we look forward to welcoming these companies as they take part in the historic transformation of our economy,” Al-Qasabi said. 

Memoranda of Understanding exchanged at the Forum include:

  • University of Tokyo and King Fahd University of Petroleum and Minerals (KFUPM) – the academic exchange for research in renewable energy and petrochemicals
  • Kyoto University Institute for Advance Study (KUIAS) and King Abdullah University for Science and Technology (KAUST)– to promote the exchange of scientific materials, publications, and information and exchange of faculty members and researchers, students and joint research
  • University of Tokyo and King Abdullah University for Science and Technology (KAUST) – to collaborate on the research and the next generation of organic and soft electronics and efficient generation of hydrogen
  • Japan Patent Office (JPO) and Saudi Authority for Intellectual Property (SAIP) – to promote the exchange of data and best practices in the field of intellectual property protection including trademarks and patents
  • Sumitomo Mitsui Banking Corporation and Saudi Arabian General Investment Authority (SAGIA) – to enhance investment opportunities between Japan and Saudi Arabia
  • Mitsubishi UFJ Financial Group and Saudi Arabian General Investment Authority (SAGIA) – a framework for cooperation to enhance investment from Japan to the Kingdom of Saudi Arabia
  • Toyobo and Saline Water Conversion Corporation and Arabian Japanese Membrane Company – to develop innovative membrane technologies and manage disposed brine water generated from seawater desalination plants for environmental sustainability
  • Sojitz Corporation and AIZAWA Concrete Corporation and Al Saedan for Development – to explore opportunities and utilize 3D printing technology and local materials for housing construction
  • Cyberdyne Group and Abdul Latif Jameel Investments – to collaborate and enhance Cybernic treatment and contribute to the social development of the Kingdom.
  • Saudi-Japan Vision Office Riyadh (VRO) and National Industrial Development and Logistics Program (NIDLP) – to expand collaboration and enable investments in the field of industry, mining, energy and logistics
  • TBM and SABIC – to build a circular economy using LIMEX
  • Ministry of Economy, Trade and Industry (METI) and the National Industrial Clusters Development Program (NICDP) and the Technical and Vocational Training Corporation and Saudi-Japanese Automobile High Institute – to provide support and training for human capacity development for Saudi youth in the automotive sector