Thursday, 27 April 2017

2017 will be 'another challenging year' for Emirates – chairman

Sheikh Ahmed says airline remains profitable ahead of annual results next month 

The chairman of Dubai-based Emirates has forecast “another challenging year” after the airline reported a 75 percent profit drop in its half-year results in November.
However, he insisted the airline was still profitable, as it prepares to unveil its annual results for 2016 in the coming weeks.
Sheikh Ahmed bin Saeed Al Maktoum told reporters on Tuesday: “I think we will still be profitable [in annual results expected to be published in May], but it will be another challenging year for us again.”
Emirates in November reported a 75 percent drop in net profit in the first half of the 2016-17 financial year, attributed to economic uncertainty and subdued travel demand.
The airline’s net profit was AED786 million ($214 million), down from the same period last year when Emirates reported one of its best half-year performances.
Operating costs grew by 5 percent in the half year with fuel remaining the largest cost component, accounting for 24 percent of operating costs, Emirates said.
In January, Emirates president Tim Clark, too, predicted a flat 2017 for Emirates. “I think 2017 could be even flatter, slightly worse,” he warned in an interview with Bloomberg.
Asked what measures the airline has taken to cut costs in a tough environment, Sheikh Ahmed told reporters it monitors conditions “on a week-by-week basis” and was still pressing ahead with plans to introduce a premium economy cabin – reported in December to be scheduled for launch in the next 18 months.
Asked whether Emirates would start charging passengers for checked-in baggage, Sheikh Ahmed responded, “It depends on the market”, but gave no further comment.
He said the airline had had to make contingency plans in response to new US policies including the laptop ban and visa denial for nationals from certain Muslim-majority countries earlier this year, including scrapping five of its 12 US routes.
The airline will look to cultivate new business opportunities from an estimated 100 under-exploited destinations in its existing bilateral agreements. Emirates will target new routes to Africa and the Far East in particular, redeploying aircraft from the scrapped US routes, the chairman said.
“We always think about what could be the new markets that we have to deploy aircraft to if that would be the case,” he said.
“At present I have at least 100 destinations on my [existing] bilaterals that I haven’t really used.”
“It’s a matter of supply and demand. I am ready to find ways and means to go into different markets. So it’s maybe that some of the challenges you see today could be a benefit because I will be very much exploring those points in a different way,” he added.
He stopped short of agreeing with Qatar Airways CEO Akbar Al Baker’s pronouncement that the US ban on electronics in aircraft cabins was “unnecessary”, but said he had been unable to see the reasoning behind it himself. “I really tried to find out what it is and why [electronics had to be] put in the belly of the aircraft, but I couldn’t really satisfy myself.
“But I think we have to respect countries’ and their rules.”

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