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Emirates Posts Record Profits

Thu May 02, 2002 9:07 am


The Annual Report of the Group, which comprises Emirates Airline and Dnata, was announced at a press conference at its Dubai hub today (Tuesday 30th April 2002) by Group Chairman, HH Sheikh Ahmed bin Saeed Al-Maktoum.

In his review of the year, Sheikh Ahmed said: "In a normal year, our profitable results would have been a superb achievement; in 2001- 2002, it is exceptional and probably unique."

Total Group revenue increased by 12.9 per cent to Dhs7.8 billion (US$2.1b) in the year ending 31st March 2002, compared with Dhs6.9 billion (US$1.9b) in the previous year.

Of the Group net income of Dhs603 million (US$164m), Emirates' profits rose 11% per cent from Dhs421.8 million (US$115m) to Dhs468.2 million (US$127m). Dnata returned a net income of Dhs134.8 million (US$37m), up from Dhs109.5 million (US$30m) for last year.

Referring to the recent industry trends following the tragic events of September 11, Sheikh Ahmed commented: "This notoriously cyclical industry of ours was already at the bottom of the cycle at the beginning of September 2001. The horrors of September 11 plunged it into chaos. We were not immune."

However, the chairman pointed out that whilst it would have been forgivable to give up on the prognosis for another profitable year, Emirates did not. "We only briefly and marginally reduced our schedules, redoubled our efforts in our markets, severely restrained costs, and kept to our plans," he said.

"This meant lending our full support to the Government of Dubai's massive infrastructure plans to develop commerce and tourism and attract 15 million annual visitors by the year 2010 - a strategy in which we have the utmost confidence. Consequently, at the Dubai Air Show in November, we announced orders for $15 billion worth of new aircraft, covering 22 A380 Super Jumbos (with 10 options), 25 Boeing 777s, eight A340-600s and three A330-200s, in addition to the six A340-500 very long-range airbuses (with 10 options) already on order," added Sheikh Ahmed.

Maurice Flanagan, Emirates' Group Managing Director, brought up an issue of concern to Emirates in his review of the year, saying that ill-informed allegations about hidden subsidies (despite publication of transparent, audited annual accounts) may affect government decisions on offering traffic rights to Emirates.

"This hits us on a vulnerable spot because we ourselves have no such protection at all," said Mr Flanagan. "The Government of Dubai, in the promotion of Dubai's economy, sensibly maintains an Open Skies policy. We are therefore subject to unlimited foreign competition in our home market. In these circumstances, we have to be smart to survive, and I am happy to say that we do much more than survive."

Emirates Airline
A bold "business as usual" strategy, in the aftermath of September 11, by Emirates' sales teams network-wide, achieved excellent sales figures in the last quarter, especially in securing business from competitors who had cancelled or suspended flights to Dubai.

Overall, airline passenger numbers grew by 18.3 per cent to 6.8 million, with seat factor down slightly from 75.1 per cent to 74.3 per cent. Available seat kilometres increased by 19.7 per cent, with costs up by only 13.6 per cent, reflecting improved productivity.

Paradoxically, the upsurge in passenger traffic reduced available freight space in aircraft. However, Emirates SkyCargo reported an 8.7 per cent improvement in revenue, with cargo tonnage up by 19.5 per cent to 400,569 tonnes.

Mr Flanagan commented: "Our business suffered particularly badly from the perception that, despite the appalling evidence to the contrary, the nearer one is to Afghanistan, the greater the risk, and Dubai was falsely perceived as being very close. Traffic on most of our routes, especially our crucial European routes, fell drastically. It is, therefore, satisfying to be able to report, less than seven months later, that the Group more than recovered its equilibrium."

Emirates' network grew to 57 destinations in 40 countries with the start of operations to the Indian city of Hyderabad and Morocco's commmercial capital, Casablanca, in addition to extra services to Hong Kong, Tehran and Johannesburg.

Emirates' Destination and Leisure Management division, which includes the wholesale tour operating company Emirates Holidays, the Dubai Destination Management Company Arabian Adventures, and the Al Maha Desert Resort, posted results ahead of expectations, with customer numbers reaching 170,000.

The number of scheduled airlines using the Dubai International Airport rose from 95 to 105. As the sole ground-handling agent, Dnata Airport Services was responsible for handling nearly 60,000 aircraft and taking care of more than 13.8 million passengers, a 7.9 per cent increase over last year.

Handling freight operations at the airport, Dnata Cargo registered a record 10.9 per cent increase in tonnage to 635,298 tonnes. The division also achieved an ISO9001/2000 certification, an upgrade in the original gained in 1995.

Dnata Agencies, General Sales Agent (GSA) for more than 30 international airlines, moved from their downtown offices to a sleek, new Dubai Airline Centre on the major Sheikh Zayed Road, adjacent to the city’s growing conurbations.

For the full Annual Report, please visit the Group's website:
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eta unknown
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RE: Emirates Posts Record Profits

Thu May 02, 2002 9:51 am

Yet further evidence that EK is completely subsidised by DNATA. I find it amusing that as this was the worst year for aviation, EK's spin doctor claims the carrier wasn't as affected as other airlines as EK doesn't serve North America. Gimmie a break!
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RE: Emirates Posts Record Profits

Thu May 02, 2002 11:57 am

Isn't Dnata part of the EK Group? If this is the case, so what if Emirates is subisdised by Dnata.

The company made a profit, which I thought was the main purpose of any business.

Don't revenues from all of the activities of AMR Corp, UAL, Qantas, British Airways, etc get included in their respective profit & loss statements?

The EK Group is doing well & if the majority of passengers have nothing to do with the US market, why would they be affected?

Emirates are good at what they do & know how to promote themselves. You also have to take into consideration the markets they serve & the passengers they carry.
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eta unknown
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RE: Emirates Posts Record Profits

Thu May 02, 2002 1:57 pm

MEA- You have missed the point entirely.
The article reads Emirates made a profit. I think we all know that it's DNATA making the profit and sending funds over to EK. Nothing wrong with being profitable, but EK really isnt.
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RE: Emirates Posts Record Profits

Thu May 02, 2002 2:05 pm

ETA is right. Even a lot of cabin crew who work for EK feel that way.

But then again if they don't have to pay for fuel (?) or landing fees at DXB, they're bound to make that much money!
Proud to be an Assyrian!
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RE: Emirates Posts Record Profits

Thu May 02, 2002 4:03 pm

Sorry ETA, my main point was that the Emirates Group as a whole made a profit. I should have maybe worded the message differently but I was in a rush.
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RE: Emirates Posts Record Profits

Thu May 02, 2002 9:11 pm

It's great they made a profit--but it's marginal at best. They will have to do considerably better if they are going to expand at the rate they intend.
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RE: Emirates Posts Record Profits

Thu May 02, 2002 9:12 pm

Those Sheikh's ..

poor in Billions ..

and then say they made a profit ..

The finances of those Gulf airlines always have been a Black Box ...

 Wink/being sarcastic
"Never mistake motion for action." Ernest Hemingway

RE: Emirates Posts Record Profits

Thu May 02, 2002 9:19 pm

I'm more inclined to believe that the profits probably have more to do with EK's lack of direct services to America, as well as Emirates just being very good at their job (as MEA suggested). They know how to make themselves known, and the hub/spoke at DXB is working very nicely.

For sure other factors probably help, but you'd be surprised at the number of concessions some airlines get from airports in other parts of the world (Ryanair etc.)

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