x Abu Dhabi, UAEThursday 27 July 2017

Dubai-owned Emirates Airline set for record results

The Dubai-owned carrier is expected to post record results next month as visitors to the emirate increase.

Emirates Airline is expected to post a strong profit on the back of a worldwide increase in demand for corporate and leisure air travel. Randi Sokoloff / The National
Emirates Airline is expected to post a strong profit on the back of a worldwide increase in demand for corporate and leisure air travel. Randi Sokoloff / The National
Emirates Airline is expected to post record results next month despite regional political turbulence and the rising price of oil.
The Dubai Government-owned carrier is expected to achieve a net profit of about US$2 billion (Dh7.34bn), analysts say.
The airline recorded a first-half result of $925 million in earnings after a 19.4 per cent jump in passenger traffic during the period, running from April to September, compared with the same period in 2009. Its fiscal year closes at the end of this month.
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Emirates traditionally pays an annual dividend to the Dubai Government and is expected to this year as well.
While the past few months have been marked by political unrest in the Middle East and natural disasters in Asia, these events should not overshadow the worldwide increase in demand for corporate and leisure air travel, said Peter Harbison, the executive chairman of the Centre for Asia Pacific Aviation (Capa).
"Globally, the second half of the year has been so much stronger than the first half," he said during the Aviation Outlook Mena conference in Dubai yesterday. "I would be very surprised if [Emirates] didn't double their results based on the first half."
Emirates, the world's largest international carrier by capacity, reported its best results during the fiscal year ending in March 2008, just prior to the global financial downturn, when the airline posted earnings of $1.36bn. During the financial crisis, its 2009 results dropped to $267m but rebounded to $975m in the fiscal year ending in March last year.
Richard Jewsbury, Emirates' senior vice president of commercial operations for the Far East and Australasia, declined to give details but described the company's first-half results this year as "good" and hoped "the year-end will be stronger". The results are expected to include the performance of the carrier's passenger and cargo operations from about 152 wide-body aircraft, as well as the activity of two dozen Emirates subsidiaries in the travel and retail sectors.
Yesterday's comments may allay earlier concerns that unrest in the parts of the Mena region could dent the airline's results.
Last month, Tim Clark, the Emirates president, said the unrest had hurt the airline's bookings to an extent over the previous six weeks. Business travel to the countries where unrest had occurred had fallen, and Chinese business and tourist arrivals in the region had "disappeared", he said at the time.
Capa recently gave Emirates its airline of the year award and said the carrier, along with Southwest Airlines of the US, were the world's two most influential airlines and had reshaped the air travel business. Southwest pioneered low-cost services in the 1970s, Mr Harbison said, while Emirates was innovative in using ultra-long-haul aircraft to connect virtually any two points on the globe via its Dubai hub.
Emirates had boosted its success by linking up with and supporting Dubai's tourism and events industry, he said. The airline has almost 200 aircraft on order, including 75 Airbus A380 superjumbos.
Mr Jewsbury said annual world passenger traffic would double in the next decade because of rising populations and globalisation.
In a recent research note, Royal Bank of Scotland (RBS) said it expected Emirates and other Gulf carriers to leverage their geographic advantage and focus their growth on traffic flows among India, China, Africa and the Middle East.
By 2020, Emirates will be operating about 250 aircraft, including some from additional orders of the A380, and will have added approximately 46 destinations, with a heavier emphasis on south Asia and North America, RBS said.
But the carrier's fleet would be smaller than those of Lufthansa, Air France-KLM and United Airlines, the report noted. "The scale of the Emirates fleet, on our modelling, would be modest," it said.