flydubai has its second consecutive annual profit as network continues to overlap with Emirates

Flydubai, the largest LCC by far in the Middle East, has delivered its second consecutive profit in its five years of existence. Revenue and profit grew faster than capacity growth, producing a slight improvement in margin to 6%. ASK growth of 28% in 2013 is more impressive when considering flydubai launched 17 new routes, with each new route requiring large resources. Some 39% of flydubai destinations are also served by Emirates, separately managed but with the same ownership and a limited partnership.

Runway works at its Dubai hub may dampen revenue, but flydubai plans to take eight 737s in 2014 compared to the seven added in 2013. Growth will continue to be strong as flydubai takes delivery of its backlog, including aircraft purchased at the Dubai Airshow in Nov-2013.

The introduction of business class enhances flydubai's position, but some settling down might be in order to improve load factors (an estimated 66% in 2013) and for flydubai to maximise its position of sitting on relatively uncompetitive markets.