Perhaps the most eagerly awaited set of results in the local transport sector, the full-year Emirates results have been lent added weight this year as a result of the upheaval in the international aviation sector.
Emirates is more than just an airline; it is Dubai Inc’s most recognisable brand. As the carrier has spread its routes throughout the world’s markets, the carefully polished Emirates brand has attained that almost-impossible-to-achieve cache of impregnability.
Of course, outside the Middle East, Emirates and the other Gulf carriers have their detractors. The Europe-based giants claim that the Dubai operator, together with Etihad and Qatar Airways, all owe their success to state backing. In return, Emirates et al point to the protectionist regimes of many European countries, which contradict the ‘open-skies’ clarion call so favoured by IATA.
But the company’s half-yearly results tempered expectations somewhat. Despite an almost-90% drop in profits – unsurprising by virtue of the incessant parade of double-digit increases Emirates has garnered over the last few years – the carrier was still turning over a healthy profit. Since then, however, market prospects have dimmed even further, with IATA’s Giovanni Bisignani stating that the airline industry had lost a whopping US$8 billion over the course of 2009. Worse still, the global capacity results from the first two months of 2009 make last year’s depressing figures look positively shiny by comparison.
The Emirates Group made $1.37 billion in net profit in 2007/8. SkyCargo – the group’s freight arm – saw revenues increase by 20%, contributing an impressive 19% to Emirates’ total transport revenue. Needless to say, these figures are not going to be replicated this year – far from it.
But a quick look at the expansion plans of all three of the major Gulf carriers this year give no indication of what we can truly expect at the end of March. Emirates has indicated that it will continue to take delivery of aircraft from its massive order book, and has earmarked a significant growth in capacity in the Indian cargo market. But the recent realignment of the A380 away from the Dubai-JFK flagship route is certainly an indicator that passenger take-up hasn’t been what the carrier expected.
On a positive note, Emirates won’t receive its full complement of A380s – a particularly un-recessionary-friendly plane – until 2012. But until the world’s economy starts righting itself, expect more of these aircraft to face delayed delivery or simply to be mothballed. As with other Gulf airlines, Emirates’ business plan is a long-term one, and it certainly has the infrastructure in place to benefit when the upswing occurs.
In terms of the 2008/9 results, a breakeven figure would be a huge bonus for Emirates and, hopefully, a shot in the arm for the rest of the industry. It would also serve as a reminder to the naysayers that Dubai Inc is coping with the downturn along with the best of them.
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Preview: The Emirates full-year results
Perhaps the most eagerly awaited set of results in the local transport sector, the full-year Emirates results have been lent added weight this year as a result of the upheaval in the international aviation sector.
Emirates is more than just an airline; it is Dubai Inc’s most recognisable brand. As the carrier has spread its routes throughout the world’s markets, the carefully polished Emirates brand has attained that almost-impossible-to-achieve cache of impregnability.
Of course, outside the Middle East, Emirates and the other Gulf carriers have their detractors. The Europe-based giants claim that the Dubai operator, together with Etihad and Qatar Airways, all owe their success to state backing. In return, Emirates et al point to the protectionist regimes of many European countries, which contradict the ‘open-skies’ clarion call so favoured by IATA.
But the company’s half-yearly results tempered expectations somewhat. Despite an almost-90% drop in profits – unsurprising by virtue of the incessant parade of double-digit increases Emirates has garnered over the last few years – the carrier was still turning over a healthy profit. Since then, however, market prospects have dimmed even further, with IATA’s Giovanni Bisignani stating that the airline industry had lost a whopping US$8 billion over the course of 2009. Worse still, the global capacity results from the first two months of 2009 make last year’s depressing figures look positively shiny by comparison.
The Emirates Group made $1.37 billion in net profit in 2007/8. SkyCargo – the group’s freight arm – saw revenues increase by 20%, contributing an impressive 19% to Emirates’ total transport revenue. Needless to say, these figures are not going to be replicated this year – far from it.
But a quick look at the expansion plans of all three of the major Gulf carriers this year give no indication of what we can truly expect at the end of March. Emirates has indicated that it will continue to take delivery of aircraft from its massive order book, and has earmarked a significant growth in capacity in the Indian cargo market. But the recent realignment of the A380 away from the Dubai-JFK flagship route is certainly an indicator that passenger take-up hasn’t been what the carrier expected.
On a positive note, Emirates won’t receive its full complement of A380s – a particularly un-recessionary-friendly plane – until 2012. But until the world’s economy starts righting itself, expect more of these aircraft to face delayed delivery or simply to be mothballed. As with other Gulf airlines, Emirates’ business plan is a long-term one, and it certainly has the infrastructure in place to benefit when the upswing occurs.
In terms of the 2008/9 results, a breakeven figure would be a huge bonus for Emirates and, hopefully, a shot in the arm for the rest of the industry. It would also serve as a reminder to the naysayers that Dubai Inc is coping with the downturn along with the best of them.
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