Dubai: Emirates said that the closure of one of the two runways at Dubai International Airport has already had a “significant” effect on its revenues during the past two weeks due to the jump in traffic during Easter holidays.
“The effect has been significant in the last week or so, simply because we had the Easter surge. Fortunately, the flights we did have were full, but it was a pity that perhaps we couldn’t have [postponed] it a bit so that the runway shutdown could have been at the end of this month, but then again, we have to think about Eid after Ramadan,” said Tim Clark, president of Emirates Airline.
He said, however, that the carrier has managed to “come ahead” in terms of its earnings for the full-year 2018, but that its profits will not be as strong as they used to be. This is a result of other headwinds faced by Emirates this year such as higher fuel prices, currency fluctuations, and geopolitical challenges.
Clark described the current crude oil prices of over $70 (Dh257.08) a barrel as “too much,” saying that each cent of increase in fuel prices has an impact on Emirates’ bottom line.
The Dubai-based airline in November reported an 86 per cent plunge in its net profit for the first half of the year, which starts April 1, and said the next six months of the year will be “tough.” Full-year results are expected to be announced in the next 10 days.
From an operational standpoint, Emirates said it is tempted to launch more fifth freedom flights as its current ones are doing well. Fifth freedom allows an airline to fly directly between two foreign countries as long as the flight starts or ends at its hub.
Emirates already flies directly between Greece and the US, and between Italy and the US, but these operations have caused complaints from American carriers who say Emirates is unfairly taking up market share.
“The re-evaluation of the routes — the shape, size, and fit — is all under the microscope at the moment. Is that to say that we’ll no longer be looking at fifth freedoms across the North Atlantic or elsewhere? No, it doesn’t,” Clark said.
He did not specify where Emirates might fly fifth freedom flights next, but said the airline is looking at where there are gaps in the market for direct flights.
During an onstage discussion at the Arabian Travel Market ATM) exhibition in Dubai, Clark also expressed Emirates’ interest to grow its operations in India, which he described as “one of the fastest growing markets in the world.”
“[Indian] gross domestic product (GDP) remains in the right place. There’s a lot of things moving in India — except aeropolitics. India drives the lead in technologies, services, and as a country that should be at the forefront, I cannot for the life of me understand that aeropolitical restrictions are still there,” he said.
Emirates had earlier expressed its interest in expanding in India, as have other carriers internationally, but Indian regulators restrict the capacity provided to foreign airlines.
Clark on Monday said he would love to double Emirates’ capacity to India, but was restricted by the regulations, adding that he hoped he could persuade the government to allow Emirates more flying rights. He said Emirates plans to talk to Indian regulators about the matter once the dust settles from the current elections to vote for a new parliament.