Hamburg: Emirates, the world’s biggest long-haul airline, said a rebound in earnings over the past year faces a challenge this summer as a pilot shortage forces the Dubai-based carrier to trim frequencies.
Sales that stumbled after the low oil price clipped travel in Gulf economies continued to pick up in the second half through March 31, President Tim Clark said Wednesday in Hamburg. US demand has also rebounded from restrictions imposed early in Donald Trump’s presidency in the US.
The revival will come under pressure as a shortfall of 100 to 150 pilots compels Emirates to pare frequencies to destinations including Fort Lauderdale and Miami during the looming high season for global travel. Cuts will also reportedly extend to several European and Asian routes.
“We’re a tad short in pilots,” Clark said, adding that the service reductions will be short term and that crew numbers should be “alright by September or October”.
Factors including economic growth in the US and UK and high employment and rising wages in Germany continue to favour growth, he said.
While the rising oil price is boosting Gulf economies and hence local demand for travel, a 25 per cent gain over the past year presents a “challenge” for Emirates, which does not hedge, according to Clark. Prices are likely to ease though, given the supply coming into the market and barring a major geopolitical upset, he added.
Emirates is cooperating more closely than before with neighbour Etihad Airways as the Abu Dhabi carrier formulates a strategy review that may see it shrink operations following a loss of close to $2 billion (Dh7.34 billion) in 2016. The companies are “looking at all sorts of areas”, with “work going on behind the scenes”, though antitrust rules mean they can only do so much, Clark said.
The executive has said previously that a merger between the companies is unlikely, though a decision would ultimately rest with the Rulers of Dubai and Abu Dhabi. A new partnership between Emirates and low-cost sister company flydubai has been “energising” and is producing “very good flows” between the airlines, he said.
Clark was in Hamburg to promote the carrier’s new first class product on a Boeing Co. 777 at the annual Aircraft Interiors Expo, with the cabins also set to feature on new 787 Dreamliners.
BOX: Emirates to exercise Airbus A380 options ‘sooner rather than later’
Hamburg: Emirates will commit to purchasing options for 16 Airbus A380 jets from a previously announced $16 billion order that handed a lifeline to the slow-selling jet, the airline’s president said on Wednesday. Emirates placed a provisional order for 20 of the double-decker superjumbos in January, which it has since finalised, with an option for 16 more.
“We will exercise them sooner rather than later,” Emirates President Tim Clark told reporters in Hamburg. The January order secured the future for world’s biggest passenger jets for at least another decade, saving it from being scrapped.
Emirates is the A380s biggest backer, ordering far more than any other customer and making it the flagship of a fleet that has helped transform Dubai into a major international air hub.
The airline is still evaluating which engines it will use to power its new A380s, which are due to be delivered from 2020, Clark said.
-Reuters
