Business | Aviation
Ahmad says Emirates is unaffected by global slowdown
Ahmad says airline is unaffected by global slowdown as group plans to hire 12,000 staff this year.
- By Shakir Husain, Staff Reporter
- Published: 00:45 May 1, 2008
- Shaikh Ahmad says airline is unaffected by global slowdown as group plans to hire 12,000 staff this year.
- Image Credit: Supplied Picture
Dubai: Emirates on Wednesday said it will achieve strong passenger and revenue growth in the current financial year despite the challenges of rising fuel prices and economic slowdown in some parts of the world hurting the global airline industry.
"We do not anticipate a drop in the number of passengers," said Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group.
A slowdown may be happening in places like the US but "we do not see this trend here," he said, and added that "I am sure some airlines will be affected by the high fuel prices."
In the April 2007-March 2008 period, Emirates added 13 per cent capacity and flew 21.2 million passengers, 3.7 million more than in the previous financial year.
"Despite the fuel price rise and the continuing subprime crisis the group will continue to show double-digit growth in the year 2008-09," Shaikh Ahmad said.
He noted in a statement that "Emirates is fortunate to be located in Dubai" in the middle of the East-West route and the threat of a global economic downturn will be offset by the economic boom in the Middle East.
About the airline launching a possible initial public offering, Shaikh Ahmad said the Dubai government "has been thinking about [selling] 25 to 30 per cent but no decision has been made yet."
"It is the government's call," he said when asked if an IPO would happen before March 2009.
The airline has set an ambitious target of achieving 85 per cent load factor this year.
In 2007-08, Emirates had a target of 75.2 per cent but managed to achieve 79.8 per cent.
"We are trying to get five per cent more," said airline president Tim Clark. He added this would mean additional revenues of between seven and 10 per cent for the airline.
The airline aims to have a fleet of 450 aircraft by 2020. At present Emirates has firm orders for 181 planes worth $58 billion at list prices.
The fleet is expected to grow to 163 aircraft by the end of 2010.
"We are preparing for the future, which will see the airline becoming one of the biggest international carriers," Shaikh Ahmad said. "As we plan for the next decade, our biggest challenges will be to find more pilots, engineers, cabin crew and skilled staff across our various business units," he added.
According to Clark, Emirates will hire 12,000 staff this year alone.
At the end of March 2008, the group employed 35,286 people, representing 145 nationalities. The group hired more than 7,000 staff, including 2,000 cabin crew and 400 new flight deck crew, in the April-March period.
European planemaker Airbus has paid Emirates compensation for the late delivery of the A380 planes, according to the airline's annual report released yesterday.
Emirates is buying 58 of the superjumbos. The airline received Dh404 million in liquidating damages from parties who failed to meet contractual obligations with Emirates.
A large part of that was the compensation for the A380 delay, said Clark.
Emirates would have had 17 of A380s by now if Airbus had manufactured and delivered them on schedule to the largest buyer of the double-decker plane.
Airbus chief executive officer Thomas Enders said in Dubai on Tuesday that the company is carrying out a review of its global delivery targets for the A380 this year. Emirates is expecting five A380s in by March 2009 and 12 more in the next 12 months.
About the airline's intention to sell its minority interest in SriLankan Airlines, Clarke said it is for sale but no negotiations are taking place with potential buyers at present.
Ticket prices on some routes are likely to go up as Emirates is considering an additional fuel surcharge.
A senior official said the airline, however, may not pass the full burden on to passengers, and the new surcharge would not be levied on all routes.
"We will obviously introduce surcharges where we have to. Some markets will take it, others won't," Tim Clark, president of Emirates Airline, said.
Fuel costs remained the top expenditure for the fourth financial year, accounting for 30.6 per cent of total operating costs compared with 29.1 per cent the previous year and 27.2 per cent the year before.
The airline's fuel risk management programme saved the company Dh888 million in 2007-08, as crude oil prices approached $90 per barrel in the second half of the fiscal year, 50 per cent more than $60 per barrel in the same period the year before. The plan has saved Dh3.7 billion since 2000-01, Emirates said.
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