Dubai: After having increased airfares by about 15 per cent this year, Emirates could be forced to raise them again this year if oil prices continue to rise, Tim Clark, Emirates President, told Gulf News.
"We have already done it a number of times this year. We have increased by 15 per cent already. We are leaving it as it is for now. But we may have to tend to our costs if oil prices go up to $150 (Dh550.50)-$160 per barrel levels," he said.
Fuel accounted for 43 per cent of the airline's costs last year, according to Clark.
Unrest factor
"No airline is going to be able to continue what it wants to whether it's pricing, cost reduction or capacity or network programme. You cannot sustain. And I don't believe that the global economy would be able to sustain that kind of a price for too long.
"So I am hoping that equilibrium will come into play sooner than later.
"We have got to manage the whole business and see what the propensity is to take fare increases and if we can't do it I have got to think about other buttons to push and levers to pull."
Even as Emirates was hit by the unrest in the Middle East and faced the recent natural disasters such as ash cloud and the Japan earthquake, the region's largest carrier's earnings for financial year 2010-2011 are "on course", said Clark.
Financial results
The carrier is due to release its financial results shortly. Emirates may tap the debt market again, Clark said, "after paying off a bond that matured earlier in the year".
"We tested the waters and we pulled our bond off the table. We could come back in again."
He did not divulge any time-line.
In March, Emirates fully repaid a $500-million bond that was listed on the Luxembourg Stock Exchange in 2004.
A380 orders could increase to 120
Emirates, which currently has 90 Airbus A380s on order, could increase its order to around 120 superjumbos, according to Tim Clark, Emirates President.
"If we had space available to have more A380s at Dubai International Airport, we would do that and get 120 A380s," further adding that it [120] was the original figure and that Emirates had to bring down because "we couldn't fit them in".
With all of the 90 superjumbos due to arrive by November 2017, Emirates in future will see more A380s, Clark said. "And much will depend on the dynamics of the airport changes — at Al Maktoum International Airport down in Jebel Ali and at Dubai International," he said.
