AVIATION
Emirates reports half year profits of US $ 225 m
Despite global challenges:
Emirates airline produced a net profit of Dhs 827 million (US $ 225
million), for the first six months of its current financial year ending
September 30, 2011. The airline continues to be the fastest growing
airline in the world and continues to make a profit despite unstable
global economic, geopolitical and environmental conditions.
Since March 31, 2011, Emirates airline expanded its fleet with
ten new aircraft. |
Emirates remains on its strong growth trajectory which over the past
seven years has seen the airline grow from a fleet of 60 aircraft, in
2004, to its current 161 wide-bodied aircraft including, the largest
fleet of A380s with 17 and the largest fleet of Boeing 777s with 93. In
addition, the company’s revenue has increased steadily by 20 percent per
annum over the same time period resulting in a record 23 years of
profitability, unmatched by any other airline.
Since 2004, when Emirates acquired its first long-haul wide-body
aircraft, allowing for much broader global expansion, the airline has
opened 39 new outstations and now flies to 115 destinations in 67
countries. Emirates continues to expand its global footprint, having
launched Geneva, Copenhagen and St. Petersburg since April 2011 and will
continue with eight additional new route launches including Baghdad on
November 13 and Rio de Janeiro, Buenos Aires, Harare, Lusaka, Dallas,
Seattle and Dublin in early 2012.
“Emirates remained focused on its long-term strategy despite global
instability, ever climbing fuel prices which resulted in Emirates paying
US $ 1 billion more in fuel costs over the same period last year and
fluctuating exchange rates,” said Emirates Airline and Group Chairman
and Chief Executive Sheikh Ahmed bin Saeed Al-Maktoum. “The global
challenges of the past six months have again put Emirates to the test,
and once again we have risen to the challenge and continue to maintain
our high standards of product and services,” he said.
“Emirates’ latest half-year performance is testament to the airline’s
strong business foundations and tenacity to stay on course and continue
to grow despite the unsteady marketplace,” he added. “We have continued
to invest in our eco-efficient aircraft fleet; in strengthening our
global route network; and also in supporting the infrastructure for our
growing business and it continues to pay off,” he said.
In the first-half of its financial year 2011-12, Emirates posted
strong business growth, both in terms of capacity on offer and traffic
carried, performance that has been in stark contrast to the current
trend seen across the aviation industry. Capacity measured in Available
Seat Kilometres (ASKM), grew by 8.2%, while passenger traffic carried
measured in Revenue Passenger Kilometres (RPKM) was up 5.7 percent with
Passenger Seat Factor sustained at a high level, averaging 79.3 percent
despite the growth in capacity, slightly below last year’s record for a
six month reporting period of 81.2%. The volume of cargo uplifted was in
line with last year.
Emirates revenue, including other operating income, of Dhs 30.3
billion (US $ 8.3 billion) was higher by 15 percent compared with Dhs
26.4 billion (US $ 7.2 billion) recorded last year, largely reflecting
improved passenger and cargo yields based on increased fuel prices.
Emirates’ cash position on September 30 remained strong with Dhs 13.8
billion (US $ 3.8 billion), compared to Dhs 14.0 billion (US $ 3.8
billion) on March 31, 2011.
Maintaining this cash balance was achieved after settling capital
outflows of more than Dhs 4 billion, primarily towards aircraft
pre-delivery payments’, other aircraft assets and repayment of bond
financing. During the first half, the airline has also successfully
raised financing of US $ 1 billion through the issue of a new bond, as
well as financing ten new aircraft deliveries, reflecting strong
investor confidence in Emirates business model and financial
performance.
Emirates’ current fleet size is 161 aircraft.
Since the beginning of its current financial year, the airline has
received delivery of ten new wide body aircraft, with another 13 new
aircraft scheduled to be delivered before the end of the financial year
(March 31, 2012).
‘Aviation is a team effort’:
Working together delivers economic benefits - IATA
The International Air Transport Association (IATA) urged cooperation
and innovation across the aviation value chain and with governments to
take advantage of aviation’s ability to drive economic growth.
“The global connectivity that aviation provides is the lifeblood of
the global economy. Around the world, aviation supports 33 million jobs
and $ 3.5 trillion in economic activity - $1.2 trillion of this in the
US alone. The world is thirsty for our product, giving us tremendous
potential for growth and innovation. But there are no guarantees in
turning that potential into reality. Aviation is a team effort. The
industry value chain and governments must work even more closely
together to ensure safe, secure, efficient and environmentally
responsible air services,” said IATA’s Director General and CEO Tony
Tyler, in an address to the International Aviation Club in Washington.
Tony Tyler |
Tyler highlighted safety as an example of the success that can be
achieved when industry and governments work together with a common goal
that drives constant innovation. “In the decade ending this year,
airlines will have safely transported over 23 billion people and nearly
426 million tonnes of cargo. Those amazing statistics are the result of
our rich history of working together to address the fundamental
challenge of safety with global standards that are consistently
applied,” said Tyler.
Tyler also focused on aviation’s environmental challenge. “Aviation
has the most ambitious environmental commitments of any industry sector,
including cutting net emissions in half by 2050 compared with 2005
levels. Sustainable biofuels have the greatest potential to contribute
to this goal, with up to 80% reduction in CO2 over the lifecycle of the
fuel. But the industry needs help to turn potential into reality.
Specifically, we must work together to convince governments to take
policy measures to support a framework for their success. It is in
everybody’s interest to improve environmental performance, energy
self-sufficiency and create jobs in the green economy,” said Tyler.
“Unfortunately, the attention of governments is being distracted by
Europe’s unilateral plan to include international aviation in its
emissions trading scheme. The industry supports market based measures -
including emissions trading - that are globally coordinated through the
International Civil Aviation Organization (ICAO),” said Tyler who noted
that Europe’s plans are coming under increasing pressure as states
express their concerns over sovereignty issues. The US is debating
legislation to prohibit its carriers from participating and 26 states
sponsored a declaration by the ICAO Council urging Europe’s governments
to abandon their unilateral and extra-territorial plans and support the
success of a global solution through ICAO. “I cannot think of another
issue that touches international aviation, with the exception of safety,
on which China, India, Russia, Japan and the US are in agreement,” said
Tyler.
Tyler identified three additional areas where cooperation and
innovation are needed:
Security:
IATA urged governments to support innovation to improve aviation
security with IATA’s Checkpoint of the Future vision. “Airlines and
governments have spent at least a cumulative total of $ 100 billion over
the past 10 years on security. Unfortunately, for many of our passengers
that investment has made security the single biggest point of
dissatisfaction in the travel experience. It is often too slow,
unpredictable and overly intrusive. IATA’s vision is for a Checkpoint of
the Future that introduces a risk-based approach and uses technology
solutions to allow a passenger to get from curb to gate without stopping
to unpack or remove clothes,” said Tyler.
Tyler emphasized that risk-based screening does not infringe on
privacy. “Known traveller programmes are completely voluntary. And for
risk assessments we are only proposing to use information that is
already collected for governments for the immigration process,” he said.
Taxation:
“Despite our vital economic role, politicians appear to value us more
as surrogate tax collectors,” said Tyler noting IATA’s strong support of
opposition to recent US proposals to double the passenger security fee
and impose a $ 100 charge on every aircraft that takes off. “The purpose
is primarily to generate funds for the treasury at the expense of
travellers. Strong and united opposition from the aviation stakeholder
community awakened firm resistance to the proposals in Congress. We must
continue to work together to persuade lawmakers and regulators to focus
on aviation as a catalyst for economic growth and job creation. We
cannot do that if we are being buried in taxes,” said Tyler.
Regulation:
“Our challenge with governments is not just taxation. We suffer
equally, if not more, from bad regulations,” said Tyler, citing US
passenger rights regulation as an example. “Delays and flight
cancellations are estimated to have cost the US economy some $ 31.2
billion in 2008. Yet we see regulation that is meant to protect
passenger rights actually provide incentives to airlines to cancel
flights because penalties for extended delays are so costly. Not only
that, the regulation puts the entire burden on the airlines even though
the responsibility for delays is often beyond their control. I am not
arguing that airports and government agencies should also be subject to
draconian fines for equipment failures or personnel shortages that
result in passengers being unable to disembark. I am suggesting that we
eliminate this economically damaging rule and replace a rigid culture of
blame with a flexible structure mandating collaborative decision making
among all the stakeholders,” he said.
Tyler said that through cooperation and innovation, aviation can meet
its challenges. “Under my watch, IATA will continue to be a strong
advocate of industry issues. But IATA will be even more effective as a
voice in a strong chorus of industry advocates than as a soloist. And of
course the message will resonate more effectively with those we seek to
influence if we are in alignment, in harmony and delivering results,”
Tyler said. |