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Gulf and Asia News
Flydubai gets huge capital infusion
8 June, 2010
Budget airline flydubai will receive fresh government funding of
Dh280 million, raising its capital to Dh500 million following a decree
by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President
and Prime Minister of the UAE and Ruler of Dubai.
"The full amount is to be paid by the Dubai Government, according to
Law No 13 of 2010, issued by Shaikh Mohammad," the news agency WAM
reported yesterday.
Flydubai's capital had been set earlier by law at Dh220 million,
fully paid by the Dubai Government. The new law has more than doubled
the company's capital.
Chief executive Gaith Al Gaith said the increased capital would go
towards the airline's expansion, without giving any specifics.
"We will ensure flydubai continues to expand in line with our stated
objectives and we will do our best to ensure the success of our first
year continues," he said in a statement.
During 2008's Farnborough Air Show, flydubai signed a $4-billion
(Dh14.71 billion) order with Boeing for 50 B737-800 aircraft. Later
this month it will take delivery of its ninth aircraft, and the rest
will be received by 2015. By the end of next year, it will operate 13
Boeing 737-800 jets.
With ongoing financing needs, the additional capital may be used to
boost the company's leveraging capabilities in the debt markets as well.
The airline completed its first year of operations on June 1, during
which it flew more than 750,000 passengers and covered 16 destinations.
"The real plan is that we want to grow from now until 2015 with 50 aircraft and cover the region within a 4.5-hour radius.
"We want to make travel from the UAE to the region faster and easier. We will continue to challenge ourselves," Al Gaith said.
Plans for the rest of the year include expanding the network to 40 destinations.
The carrier recently began a service to Sri Lanka and entered the Indian market with flights to Luck-now after a year-long wait.
Sharjah Air Arabia, the first low-cost carrier in the Middle East
and North Africa, signed a joint venture agreement yesterday with
Amman-based Tantash Group to launch Jordan's first budget airline.
Air Arabia Jordan will provide direct services to destinations
across Europe, Middle East and North Africa from Queen Alia
International Airport, a statement said. The announcement follows the
recent launch of operations of Air Arabia's fourth hub in Alexandria.
"At a time when the global and regional economy continues to
demonstrate strong signs of sustained recovery, we are confident of the
long-term growth opportunities for the first low-cost carrier in the
Kingdom," said Adel Ali, Group Chief Executive Officer of Air Arabia.
Source: Gulf News
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