Dubai: The financial year 2014-15 will be the “second most profitable” year in the history of Emirates, according to President Tim Clark. The airline is due to release its annual results on Thursday.
“It has been a difficult year,” Clark said at a panel discussion at the Arabian Travel Market (ATM) on Tuesday, adding that the airline, however, took steps to drive the company to strong performance. “We didn’t hedge at all. And we also retired a lot of our old fleet,” he said.
“But even with all the difficulties, such as runway closure [at the Dubai International] etc, it is great that the [Emirates] Group has been able to deliver good results,” Clark added.
Emirates’ most profitable year so far has been financial year 2010-2011, when the airline recorded a 52 per cent jump in net profit to Dh5.4 billion in the year over 2009-10’s profit of Dh3.5 billion. Revenue, too, grew 25 per cent to Dh54.4 billion, largely driven by strong demand and the delivery of new aircraft.
Emirates Group, meanwhile, which includes the airline and Dnata, achieved a 43 per cent jump in net profit that year, to Dh5.9 billion, having fought environmental and political hurdles and marking the 23rd consecutive year of profit.
Response to US allegations
Emirates is making progress in compiling its response to the allegations posed against the airline by the three US carriers — United, Delta and American Airlines. The three American carriers recently submitted a 55-page dossier to the US government making multiple allegations against their Gulf counterparts.
“We will respond in a very robust manner. Our response to that report is under compilation at the moment,” Clark said. “If it took them [US carriers] two years [to compile that report], and we have a response to make — which has to be robust — we will require more time to do that. So we will do that. We will deal a sledge hammer to that report. So watch this space … it’s coming.”
Without specifying the time period in which Emirates’ response would be ready, Clark said: “We will respond in our own time … make sure it covers everything we need to, and then present it to the government.”
US carriers have been harping on the fact that Emirates and other Gulf carriers have been eating into their market share. Clark said: “Market share is not a right. It is earned.”
Europe still strong:
Asked about lucrative markets for Emirates, Clark said, surprisingly, Europe came on “stronger than we thought despite Euro being down almost 20 per cent”. He added that markets like Greece, Spain, Portugal and Italy, despite the difficulties they suffered in the Eurozone, came on quite strong for Emirates.
Greece, particularly, was a strong market for the airline “despite what is going on in the country at the moment,” he said.
Emirates has thus been increasing its production into these markets in Europe, such as putting through the Airbus A380s on some of these routes like Milan and Madrid, Clark said. “So, Europe has been very strong for us.”
Asia, meanwhile, has been a bit of a “dogfight” for Emirates, according to Clark. “There is a lot of capacity in the market there. We are kind of mixed up in the conflict between the low cost and the indigenous and legacy carriers there. But we are dealing with that,” he said.
Some African countries were also a little bit weaker than expected for Emirates in the year, Clark said, owing to factors like Ebola etc.
“But overall it has not been a bad year,” he said.
A380neo update:
Emirates has not yet heard anything from Airbus regarding the European planemaker’s progress over the A380neo (new engine option) — the more efficient version of the existing A380. “We have not yet heard anything from them [Airbus] on it. And we have not given them any deadline for it,” Clark said. “So we are just waiting.
Asked by when Emirates is likely to have an update, he didn’t divulge any time period, but said: “Maybe June, July.”
