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xwb777
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Emirates Group announces another year of profits

Thu Nov 07, 2019 9:25 am

The Emirates group has today announced its half year performance for 2019-2020.

Emirates Group:
-Revenue down 2% to AED 53.3 billion (US$ 14.5 billion).
-profit of AED 1.2 billion (US$ 320 million), up 8%. Results impacted by Dubai International Airport (DXB) runway closure, decline in fuel cost, unfavourable currency movements, and bankruptcy of Thomas Cook.

Emirates Airline:

- Revenue down 3% to AED 47.3 billion (US$ 12.9 billion), and
-profit increase of 282% to AED 862 million (US$ 235 million).
-seat load factor of 81.1%, up 2.3%pts.
-29.6 million passengers carried.
- destinations: 158 city
- ASK 186.6 billion (5%)
- RPK (2%)
- profit margin: Sep 18: 0.5 Sep 19: 1.8

Source: https://www.emirates.com/media-centre/e ... 12060981=1
 
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FrenchPotatoEye
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 9:35 am

Currentcy seems to hurt EK.

Good profits. Numbers that Etihad and Quatar can only dream of.

Still no firmed deal on the A330neo, A350 or the 787s. At the airshow perhaps!
 
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Spiderguy252
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 9:57 am

When they say "bankruptcy of Thomas Cook" impacting their profits, surely they mean that in the positive?
Vahroone
 
tommy1808
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 10:25 am

Max Q wrote:
Looks like EK’s charmed life has run its course


I think it is rather going from having the newest and most fuel efficient fleet far and wide with only state of the art aircraft to a competitive environment with other airlines flying more fuel efficient aircraft in significant numbers. And those having enough MZFW range to negate payload advantages the hub in the middle once offered for belly cargo.

So we probably just see the new normal.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
smi0006
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 10:47 am

Spiderguy252 wrote:
When they say "bankruptcy of Thomas Cook" impacting their profits, surely they mean that in the positive?


No - Dnata is one of the world largest ground handling agencies and a core (more profitable?) part of the Emirates group. Thomas cook was a big client of theirs.
 
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vhtje
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 10:59 am

All shares in The Emirates Group are privately held by the Government of Dubai. As such, there is no requirement for them to report their figures. However, The Emirates Group has a public policy of financial transparency, and so pursuant to this policy, publish annual reports on their corporate website; anyone can freely access them.

The question is: do we completely believe the figures they publish? It would be easy enough for Emirates to 'enhance' the figures to satisfy a political agenda. Privately held companies usually only make their finances availably publicly in the lead up to an IPO. There is no indication that the Government of Dubai is going to start selling The Emirates Group off anytime soon. Therefore, we must conclude Emirates' publishing of their financial reports is being done to influence public opinion.

Which leads me back to my question: do we completely believe the figures they publish? The answer to that lays in the motives of the Government of Dubai, and of the board of The Emirates Group.

Note: I am not saying I personally doubt the figures published. Frankly, I wouldn't have a clue as to if they are gospel truth or the work of fantasist. I am just looking at the motives behind the decision to publish, and asking the question.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
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eta unknown
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 11:29 am

I've never believed the figures and I used to work for them. IMO a lot of money is moved around the entire group... DNATA is probably much more profitable, but some funds are diverted to the airline.
 
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FrenchPotatoEye
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 11:45 am

vhtje wrote:
All shares in The Emirates Group are privately held by the Government of Dubai. As such, there is no requirement for them to report their figures. However, The Emirates Group has a public policy of financial transparency, and so pursuant to this policy, publish annual reports on their corporate website; anyone can freely access them.

The question is: do we completely believe the figures they publish? It would be easy enough for Emirates to 'enhance' the figures to satisfy a political agenda. Privately held companies usually only make their finances availably publicly in the lead up to an IPO. There is no indication that the Government of Dubai is going to start selling The Emirates Group off anytime soon. Therefore, we must conclude Emirates' publishing of their financial reports is being done to influence public opinion.

Which leads me back to my question: do we completely believe the figures they publish? The answer to that lays in the motives of the Government of Dubai, and of the board of The Emirates Group.

Note: I am not saying I personally doubt the figures published. Frankly, I wouldn't have a clue as to if they are gospel truth or the work of fantasist. I am just looking at the motives behind the decision to publish, and asking the question.


The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.
 
Scotron12
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:13 pm

FrenchPotatoEye wrote:
vhtje wrote:
All shares in The Emirates Group are privately held by the Government of Dubai. As such, there is no requirement for them to report their figures. However, The Emirates Group has a public policy of financial transparency, and so pursuant to this policy, publish annual reports on their corporate website; anyone can freely access them.

The question is: do we completely believe the figures they publish? It would be easy enough for Emirates to 'enhance' the figures to satisfy a political agenda. Privately held companies usually only make their finances availably publicly in the lead up to an IPO. There is no indication that the Government of Dubai is going to start selling The Emirates Group off anytime soon. Therefore, we must conclude Emirates' publishing of their financial reports is being done to influence public opinion.

Which leads me back to my question: do we completely believe the figures they publish? The answer to that lays in the motives of the Government of Dubai, and of the board of The Emirates Group.

Note: I am not saying I personally doubt the figures published. Frankly, I wouldn't have a clue as to if they are gospel truth or the work of fantasist. I am just looking at the motives behind the decision to publish, and asking the question.


The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


Yes...I remember Arthur Anderson quite well, and Enron of course!

But their numbers look realistic...it's not huge but not a loss either.
 
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lightsaber
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:19 pm

EK has believable annual reports as the history shoes a trend with operations, economics, and how the airline is managed:

https://www.emirates.com/english/about- ... rency.aspx

This isn't the great margine of 2015-2016 (see above). Or 2010-2011...



FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course



You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.

Companies are compared on profit, profit margins, and growth.

https://news.delta.com/delta-air-lines- ... 019-profit

Delta's revenue is $12.5 billion per quarter with a quarterly profit if $1.4 billion.
1st quarter was $10.5 billion, $730; million profit
https://ir.delta.com/news/news-details/ ... fault.aspx
So DL had $23 billion of revenue vs. (if I did the currency conversion right) $12.7 billion for the airline
DL made $2.1 billion profit vs. $235 million for the Emirates airline:
https://www.cnbc.com/2019/11/07/emirate ... ofits.html


For just under twice the revenue, DL had 8.9x the profit. We compare as one has to question why EK has lost there revenue premium.

Why do you believe they lost the premium? I believe the connecting passenger market has become brutal. The Chinese airlines are losing billions. Premium customers prefer to fly direct and with mire P2P flying, EK (as well as QR and EY) are being bypassed.

There needs to be a strategic shift for EK. What would you do?

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
ScottB
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:22 pm

FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


Enron's results were audited, too. WeWork's numbers were audited by EY (the auditor, not the airline).

airlinerart wrote:
And if you say 'minuscule' then that implies the big US three must have made profits of 100s of Billions!


They are minuscule compared to Delta. Over the same six-month period, Delta showed a pre-tax profit of $3.85 billion (remember, EK doesn't pay taxes). EK's profit was 6.1% the size of Delta on just over half as much revenue. Net margin of 1.8% at EK is terrible in a relatively benign economic environment. Moreover, it's likely the only reason EK made a profit was thanks to a reduction in fuel costs which was ~230% the size of their reported profit. The runway closure at DXB also improved yields.

vhtje wrote:
The Emirates Group has a public policy of financial transparency, and so pursuant to this policy, publish annual reports on their corporate website; anyone can freely access them.


Their annual reports are very heavy on flashy graphics and not so much on actual financial numbers.
 
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Polot
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:23 pm

airlinerart wrote:
Max Q wrote:
Minuscule profits compared to the US big three


So where are your figures for this?

And if you say 'minuscule' then that implies the big US three must have made profits of 100s of Billions!

Surely that isn't right or are you just using emotive language to bash none US airlines?

Look at the US3’s profit margins then compare it to EK’s.

I agree with others that can’t really be compared due to very different operations, but things have changed significantly in the last 10-15 years when the US airlines were struggling compared to most airlines and EK looked unstoppable.
 
xwb777
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:41 pm

I think that we can't compare Emirates results with the ones of the US3. The US3 has a huge domestic market, that the majority of where their income is. Emirates and the ME3 in general has a zero domestic market.
 
FluidFlow
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 12:57 pm

lightsaber wrote:

FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course



You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.

Companies are compared on profit, profit margins, and growth.



There needs to be a strategic shift for EK. What would you do?

Lightsaber


First, yes they are but here it is apples and oranges we compare. One is a publicly traded company poised to generate revenue to survive, on the other side is a "government" controlled entity set up to promote the country of origin.

And yes there has to be a strategic shift to smaller aircrafts to connect secondary asian cities that do not have a one stop to europe/america. That means a reduced fleet size and especially aircraft size.

Scrap the 77X and A380 order, convert them 787-9/10s, A330-800/900s and A321s. Instead of flying the masses, fly the high yield passengers. The days of VLAs are over and the 77X is too big. The remaining A380 can to the slot restricted airports in Europe and the US. Use the flexible smaller aircrafts (787/A330/A321) to open new markets and also downgauge on routes that are overserved.
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 1:16 pm

FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course



You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.


That goes against previously floated theories that US3 doesn't know how to run an airline.

Also, RPK is down 2%, which means $300 Million came from cost-cutting or something else.

Isn't TCUK a competitor for dnata's travel operator business. After all dnata was a travel operator first and GHA later. EK/dnata - TCUK relationship is tricky to estimate whether its fall is negative or positive to Emirates Group.
All posts are just opinions.
 
edealinfo
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 2:21 pm

lightsaber wrote:
EK has believable annual reports as the history shoes a trend with operations, economics, and how the airline is managed:

https://www.emirates.com/english/about- ... rency.aspx

This isn't the great margine of 2015-2016 (see above). Or 2010-2011...



FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course



You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.

Companies are compared on profit, profit margins, and growth.

https://news.delta.com/delta-air-lines- ... 019-profit

Delta's revenue is $12.5 billion per quarter with a quarterly profit if $1.4 billion.
1st quarter was $10.5 billion, $730; million profit
https://ir.delta.com/news/news-details/ ... fault.aspx
So DL had $23 billion of revenue vs. (if I did the currency conversion right) $12.7 billion for the airline
DL made $2.1 billion profit vs. $235 million for the Emirates airline:
https://www.cnbc.com/2019/11/07/emirate ... ofits.html


For just under twice the revenue, DL had 8.9x the profit. We compare as one has to question why EK has lost there revenue premium.

Why do you believe they lost the premium? I believe the connecting passenger market has become brutal. The Chinese airlines are losing billions. Premium customers prefer to fly direct and with mire P2P flying, EK (as well as QR and EY) are being bypassed.

There needs to be a strategic shift for EK. What would you do?

Lightsaber


If direct flights are substituting hubs, why aren’t United or American starting Chicago to Bombay/Delhi flights?
 
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PW100
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:08 pm

ScottB wrote:
FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


Enron's results were audited, too. WeWork's numbers were audited by EY (the auditor, not the airline).


If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .
Immigration officer: "What's the purpose of your visit to the USA?" Spotter: "Shooting airliners with my Canon!"
 
jagraham
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:20 pm

lightsaber wrote:
EK has believable annual reports as the history shoes a trend with operations, economics, and how the airline is managed:

https://www.emirates.com/english/about- ... rency.aspx

This isn't the great margine of 2015-2016 (see above). Or 2010-2011...



FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course






You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.

Companies are compared on profit, profit margins, and growth.

https://news.delta.com/delta-air-lines- ... 019-profit

Delta's revenue is $12.5 billion per quarter with a quarterly profit if $1.4 billion.
1st quarter was $10.5 billion, $730; million profit
https://ir.delta.com/news/news-details/ ... fault.aspx
So DL had $23 billion of revenue vs. (if I did the currency conversion right) $12.7 billion for the airline
DL made $2.1 billion profit vs. $235 million for the Emirates airline:
https://www.cnbc.com/2019/11/07/emirate ... ofits.html


For just under twice the revenue, DL had 8.9x the profit. We compare as one has to question why EK has lost there revenue premium.

Why do you believe they lost the premium? I believe the connecting passenger market has become brutal. The Chinese airlines are losing billions. Premium customers prefer to fly direct and with mire P2P flying, EK (as well as QR and EY) are being bypassed.

There needs to be a strategic shift for EK. What would you do?

Lightsaber



The question that should be asked regarding EK is, how much profit squeeze is due to direct competition (ME3 plus TK and EK), how much is due to LH and ULH P2P flying, and how much is due to economic factors . . .
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:27 pm

FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


This was debated several times in the past on a.net

<Auditor Brand Name> PJSC is not the same as <Auditor Brand Name> PLC/LLP/LTD....

The regulator for PJSC is the same person/family as the business entity.

UK has FSA, the US has SEC, Australia has ASIC, and India has SEBI. All independent autonomous bodies.

Quality of audit depends on the financial regulations of the country and the autonomous nature of the regulator, not on the brand name.
All posts are just opinions.
 
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FrenchPotatoEye
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:34 pm

dtw2hyd wrote:
FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


This was debated several times in the past on a.net

<Auditor Brand Name> PJSC is not the same as <Auditor Brand Name> PLC/LLP/LTD....

The regulator for PJSC is the same person/family as the business entity.

UK has FSA, the US has SEC, Australia has ASIC, and India has SEBI. All independent autonomous bodies.

Quality of audit depends on the financial regulations of the country and the autonomous nature of the regulator, not on the brand name.


I hope you don't means to say that you do not be trustful of the EK performance finance report??

Because if you believe the report to be false, what next? Moon made of cheese? Earth is flat? Any other nonsenses to share?
 
vadodara
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:40 pm

lightsaber wrote:
For just under twice the revenue, DL had 8.9x the profit. We compare as one has to question why EK has lost there revenue premium.

Why do you believe they lost the premium? I believe the connecting passenger market has become brutal. The Chinese airlines are losing billions. Premium customers prefer to fly direct and with mire P2P flying, EK (as well as QR and EY) are being bypassed.

There needs to be a strategic shift for EK. What would you do?

Lightsaber


All airlines raking in money are protected by fortress hub's. DBX is one for EK but it is a connecting hub so in a sense offers no protection.

Too many copy cats in this space: QR & EY are well known. Add the Chinese. Something has to give. Perhaps the Chinese will blink first.
 
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enilria
Posts: 10144
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 5:52 pm

vhtje wrote:
All shares in The Emirates Group are privately held by the Government of Dubai. As such, there is no requirement for them to report their figures. However, The Emirates Group has a public policy of financial transparency, and so pursuant to this policy, publish annual reports on their corporate website; anyone can freely access them.

The question is: do we completely believe the figures they publish? It would be easy enough for Emirates to 'enhance' the figures to satisfy a political agenda. Privately held companies usually only make their finances availably publicly in the lead up to an IPO. There is no indication that the Government of Dubai is going to start selling The Emirates Group off anytime soon. Therefore, we must conclude Emirates' publishing of their financial reports is being done to influence public opinion.

Which leads me back to my question: do we completely believe the figures they publish? The answer to that lays in the motives of the Government of Dubai, and of the board of The Emirates Group.

Note: I am not saying I personally doubt the figures published. Frankly, I wouldn't have a clue as to if they are gospel truth or the work of fantasist. I am just looking at the motives behind the decision to publish, and asking the question.

They have Western auditors/accountants bless their report. It was also something they committed to the DOT to do, although they were already doing it long before that. BTW, let's see the Chinese airline results with a Western auditor? Apparently that's unneeded (?).
PW100 wrote:
ScottB wrote:
FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


Enron's results were audited, too. WeWork's numbers were audited by EY (the auditor, not the airline).


If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .

Exactly.
airlinerart wrote:
Max Q wrote:
Minuscule profits compared to the US big three


So where are your figures for this?

And if you say 'minuscule' then that implies the big US three must have made profits of 100s of Billions!

Surely that isn't right or are you just using emotive language to bash none US airlines?

The latter.

I do think it is worth bringing up that Emirates as a unit of the government clearly has two missions. One is to make money as a business and one is to maximize the profit/benefit to Dubai as a whole. It's not unlike if Disney owned an airline, which they have explored many times.

The US3 will charge as much as possible to drive margin and cut capacity to do it. Disney would take into consideration how the price of the air fare impacted demand to Disney. If they lowered the fare $50, but gained hotel and park revenue of $100 they would take that trade every time. Allegiant does that with their owned resorts. Apple Vacations does this. It is very common in the sun destination, leisure business to use low air fare to push people to the more profitable hotel/resort segment.

This is exactly what Emirates Group is doing on a larger scale. And what's wrong with it? It's cross-subsidization or at least margin optimization across units, but airlines cross-subsidize all the time. Do you think profits in ATL/DTW/MSP don't subsidize Delta losses as they made/make their way into SEA/BOS and now MIA? This is an age old business strategy, not unlike Black Friday where they sell TVs under cost to get you into the store where you will also buy a power strip with a 400% markup. It's just business.
 
smartplane
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 6:00 pm

xwb777 wrote:
I think that we can't compare Emirates results with the ones of the US3. The US3 has a huge domestic market, that the majority of where their income is. Emirates and the ME3 in general has a zero domestic market.

Spot on.

Remove domestic and international JV's (passenger and freight) from the US3, and international is breakeven territory.
 
B777LRF
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 6:13 pm

The purpose of EK is not to be a profit centre, albeit that's undoubtedly convenient. It's a branding vehicle, and a vital component in the effort to transform and develop Dubai as a city, business centre, tourism spot and trading post.

There is no evidence to suggest their published figures are any more less dodgy than any other large corporation, regardless of ownership structure. In fact, one could argue the point publicly held corporations are more susceptible to accounting malpractice or, indeed, outright fraud.
Signature. You just read one.
 
santi319
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 6:34 pm

dtw2hyd wrote:
FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


This was debated several times in the past on a.net

<Auditor Brand Name> PJSC is not the same as <Auditor Brand Name> PLC/LLP/LTD....

The regulator for PJSC is the same person/family as the business entity.

UK has FSA, the US has SEC, Australia has ASIC, and India has SEBI. All independent autonomous bodies.

Quality of audit depends on the financial regulations of the country and the autonomous nature of the regulator, not on the brand name.


Bingo! People believing EK’s results are the same ones believing everything on the Kardashians TV show is real.
 
CMHtraveler
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 7:52 pm

Yes, I hear indentured servitude is quite profitable.

https://medium.com/@pyok/emirates-cabin ... b9d2ca981d
 
santi319
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 8:06 pm

CMHtraveler wrote:
Yes, I hear indentured servitude is quite profitable.

https://medium.com/@pyok/emirates-cabin ... b9d2ca981d

Not surprised, anyone that knows people that work there can testify to this... and worse.

The fact that the world forgot about Flydubai 981 and the real reasons of the crash, show how good the Emirati government is at covering stuff.
 
jghealey
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 9:10 pm

Spiderguy252 wrote:
When they say "bankruptcy of Thomas Cook" impacting their profits, surely they mean that in the positive?

Presumably Thomas Cook had booked customers onto EK. Thomas Cook didn't just sell flights for their own airline.
 
Etheereal
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 9:44 pm

lightsaber wrote:

There needs to be a strategic shift for EK. What would you do?

Lightsaber


Wait for fuel prices to go up again, then some airliners wont be so feasible with direct flight.
 
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spinotter
Posts: 776
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 10:20 pm

airlinerart wrote:
Max Q wrote:
Minuscule profits compared to the US big three


So where are your figures for this?

And if you say 'minuscule' then that implies the big US three must have made profits of 100s of Billions!

Surely that isn't right or are you just using emotive language to bash none US airlines?


EK - profit increase of 282% to AED 862 million (US$ 235 million).

DL - September quarter 2019 GAAP pre-tax income of $1.9 billion, net income of $1.5 billion and earnings per diluted share of $2.31 on record total revenue of $12.6 billion.

DL's profit in just the September quarter 2019 is six times that of EK's profit for the entire year, am I correct? EK = minuscule profits compared to US3.
 
stefanJ
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Re: Emirates Group announces another year of profits

Thu Nov 07, 2019 11:15 pm

A reminder to the posters above...the figures are half year figures and not whole year.
 
ScottB
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Re: Emirates Group announces another year of profits

Fri Nov 08, 2019 11:16 am

PW100 wrote:
If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .


I would trust the AA/DL/UA results more not due to the auditors, but due to more significant post-Enron civil and criminal penalties in the U.S. for cooking the books.

xwb777 wrote:
I think that we can't compare Emirates results with the ones of the US3. The US3 has a huge domestic market, that the majority of where their income is. Emirates and the ME3 in general has a zero domestic market.


By the same token it's not fair to hold U.S. and most other foreign carriers to as high a standard as the Emirati carriers. The U.S. and European carriers will have much higher labor costs due to higher taxation in those countries; i.e. in order to pay pilots an after-tax wage comparable to EK, DL must pay out nearly twice as much once one accounts for payroll taxes for social welfare programs as well as the U.S. personal income tax. Also, labor unions are illegal in the UAE -- a competitive advantage for EK, but maybe not so great for their staff.

enilria wrote:
They have Western auditors/accountants bless their report. It was also something they committed to the DOT to do, although they were already doing it long before that. BTW, let's see the Chinese airline results with a Western auditor? Apparently that's unneeded (?).


The U.S. carriers stay silent about the Chinese carriers for the same reason why Apple and Google remove apps the Chinese government doesn't like, Hollywood sanitizes blockbusters, or the NBA grovels for the CPC -- they all need access to the Chinese market. The UAE, not so much. In any event, I still find the EK financials to be very light on numbers.
 
mjoelnir
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Re: Emirates Group announces another year of profits

Fri Nov 08, 2019 1:02 pm

Emirates was founded 1985 as a smallish airline. Has grown over the years with showing a profit on, I do not know if all, but at least most years.
Yes there profits are meager compared to the current profits of USA based airlines, but could be that the owners are just not interested at maximising profits and dividends, but in growing equity?
How many airlines, based in the USA, do exist that long, without having gone through bankruptcy at least once, shedding depts and other commitments, including the equity of the shareholders.

I assume, that the main aim of Emirates owner is to grow the footprint of the company, especially in the UAE and grow the worth of the company. I assume there is no big need to extract money from the company.
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Fri Nov 08, 2019 1:20 pm

enilria wrote:
They have Western auditors/accountants bless their report.


Are you using "bless" literally or as in auditor certifying under western regulations and penalties?

No auditor in the West would certify these reports. Certification is local to the country.
All posts are just opinions.
 
Sokes
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Re: Emirates Group announces another year of profits

Fri Nov 08, 2019 7:38 pm

tommy1808 wrote:

I think it is rather going from having the newest and most fuel efficient fleet far and wide with only state of the art aircraft to a competitive environment with other airlines flying more fuel efficient aircraft in significant numbers.



+1


FrenchPotatoEye wrote:
Because if you believe the report to be false, what next? Moon made of cheese? Earth is flat? Any other nonsenses to share?


I found that video quite cool: https://www.youtube.com/watch?v=Ko-ZboCzR64
14 million views and counting! But you enjoy it double if you get boozed first.
Why can't the world be a little bit more autistic?
 
smartplane
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Re: Emirates Group announces another year of profits

Fri Nov 08, 2019 8:58 pm

PW100 wrote:
ScottB wrote:
FrenchPotatoEye wrote:
The Emirate results are validated from EY, Kpmg PwC and other global auditors. That is fact.


Enron's results were audited, too. WeWork's numbers were audited by EY (the auditor, not the airline).


If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .

Global auditing firms now run teams for commercial aviation, as they do for finance, insurance, manufacturing, etc. They also peer review these teams. Higher standards than current Boeing and FAA safety culture.
 
maint123
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 1:51 am

These western auditors and rating agencies have proven to be quite useless in the past and corrupt in some cases. Wouldn't trust them to audit a ice cream stand. Wonder what their rating is for Boeing after a initial loss of 10 b usd, after the max accidents?
 
WBM
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 5:19 am

As someone who is by profession and education familiar with the audit process, I must say many of the comments on this post are a bit silly. Is there a chance that financial statements are materially misstated? Of course there is, just like with any other company. Is the likelihood of material misstatement higher than with a US or European airline? I suspect it is a little bit higher.

That said it is very unlikely that Emirates is another Enron. The airline business is a more straight forward of a business than the big frauds were. The important things to audit in an airline, are easier to audit. It would also be harder to hide liabilities with exotic financial transactions. Auditors are obviously not perfect, they may have these financials seriously wrong, but I would not bet on it.
 
Sokes
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 6:13 am

maint123 wrote:
These western auditors and rating agencies have proven to be quite useless in the past and corrupt in some cases. Wouldn't trust them to audit a ice cream stand. Wonder what their rating is for Boeing after a initial loss of 10 b usd, after the max accidents?


How are auditors related to rating agencies? I also find it amazing that the ruling classes can still manage to keep rating agencies relevant against all contradicting evidence.
Chartered accountants may go to jail if they sign fake books. I don't think our society could generate the wealth it does without them.
Exceptions proof the rule.

I don't find Emirates flight tickets cheap and I am confident that an Indian at check in in Dubai costs less than somebody in Germany for the same work.
Common sense doesn't suggest to me that Emirates necessarily gets governmental help.
Why can't the world be a little bit more autistic?
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 1:56 pm

Sokes wrote:
Chartered accountants may go to jail if they sign fake books..


Could you elaborate on how this works in Dubai?

Here are a couple of hypothetical scenarios.

#1
A CA from Auditors PJSC certified fake books of ABC PJSC in Dubai.
Who has the jurisdiction and who will punish.

#2
A CA from Auditors LLP certifies fake books of ABC LLP in the UK.
Sure FSA will punish Auditors, LLP.

You cannot use scenario #2 to justify scenario #1. It is not that FSA will punish the CA in #1 under the UK law.
All posts are just opinions.
 
Sokes
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 2:11 pm

dtw2hyd wrote:
Sokes wrote:
Chartered accountants may go to jail if they sign fake books..


Could you elaborate on how this works in Dubai?
...


No, I can't. But Maint123 criticized Western auditors in general. My statement was a reply to his statement.
Countries without functioning legal system are usually poor. I would be surprised if rich foreigners choose their residence or start business in such places.
While I have no knowledge about Dubai I would be surprised to learn that faking accounts goes unpunished there. Who would be willing to do business with businesses in Dubai in such scenario?
Why can't the world be a little bit more autistic?
 
waly777
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 3:08 pm

lightsaber wrote:
EK has believable annual reports as the history shoes a trend with operations, economics, and how the airline is managed:

https://www.emirates.com/english/about- ... rency.aspx

This isn't the great margine of 2015-2016 (see above). Or 2010-2011...



FluidFlow wrote:
Max Q wrote:
Minuscule profits compared to the US big three


And these results don’t come close to their own in previous years do they ?


Looks like EK’s charmed life has run its course



You can not compare US, EU and other carriers to EK as their operations are totally different. I don't know if DL could make a profit with a WB fleet only...

This are really good numbers for EK, really good numbers.

Companies are compared on profit, profit margins, and growth.

https://news.delta.com/delta-air-lines- ... 019-profit

Delta's revenue is $12.5 billion per quarter with a quarterly profit if $1.4 billion.
1st quarter was $10.5 billion, $730; million profit
https://ir.delta.com/news/news-details/ ... fault.aspx
So DL had $23 billion of revenue vs. (if I did the currency conversion right) $12.7 billion for the airline
DL made $2.1 billion profit vs. $235 million for the Emirates airline:
https://www.cnbc.com/2019/11/07/emirate ... ofits.html


For just under twice the revenue, DL had 8.9x the profit. We compare as one has to question why EK has lost there revenue premium.

Why do you believe they lost the premium? I believe the connecting passenger market has become brutal. The Chinese airlines are losing billions. Premium customers prefer to fly direct and with mire P2P flying, EK (as well as QR and EY) are being bypassed.

There needs to be a strategic shift for EK. What would you do?

Lightsaber



Or we can look @ DL's international ops separately and see if we have the same level of profits.

The US3 have an overwhelming majority of their profits from their domestic op., With an oligopoly in place, as a result of the mergers they can afford to command such premium and make such money. On the international market, not as much with cut throat competition.
The test of first-rate intelligence is the ability to hold 2 opposed ideas in the mind concurrently, and still function
 
2175301
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 3:13 pm

WBM wrote:
As someone who is by profession and education familiar with the audit process, I must say many of the comments on this post are a bit silly. Is there a chance that financial statements are materially misstated? Of course there is, just like with any other company. Is the likelihood of material misstatement higher than with a US or European airline? I suspect it is a little bit higher.

That said it is very unlikely that Emirates is another Enron. The airline business is a more straight forward of a business than the big frauds were. The important things to audit in an airline, are easier to audit. It would also be harder to hide liabilities with exotic financial transactions. Auditors are obviously not perfect, they may have these financials seriously wrong, but I would not bet on it.


This post identifies what the Auditors can and cannot do. Auditors cannot see or likely identify material mis-statements. They can say if the statements they are given appear correct in accordance with auditing standards.

In the USA currently there are real and serious legal penalties for making material mis-statements about a companies financial transactions and overall business. Those penalties did not exist in the Enron days...

My wife is from Ukraine and was essentially the equivalent of the Chief Financial Officer for a US $ Multi-Million per year corporation. However, Ukraine is very corrupt and you have to bribe a lot of people to even operate a business. You routinely have to pay bribes as well for "timely" deliveries and processing of paperwork. Bribes are technically not legal and cannot appear in the books. So the businesses must generate enough cash flow and profit to both pay the bribes... and sustain the business. Thus, the formal books which people are allowed to audit are not real. No one knowledgeable about Ukraine expects them to be; and my wife is quite confident of her ability to slip up to $15,000 US Cash ($100 bills) into her purse and casually walk across town as a single lady to deliver that cash to someone.

If you have an interaction with the Police (incident or accident) the person (or family) who can pay the police officer and their supervisors the most money is usually the official victim ... and the other person will have the police report written against them (even if you kill someone - my wife and her friends have all told me that its commonly written up as "self defense" for a wealthy individual drunk driving their luxury car who hit a pedestrian in a crosswalk at a stop sign and killed them).

I ran into an Auditor recently for an insurance company who insures international business - who recently returned from an Ukraine business audit and she commented that all the books were technically in order; but, she sensed something was off. When I explained the situation... and that her company needed someone like my wife - who really knew how business in the Ukraine works and which questions to ask and of exactly who... the insurance company Auditor smiled and nodded her head saying "that makes sense." They never followed up with my wife for her services though...

So the real question here is how corrupt or legit is the country, its legal system, and the business structure related to Emirates. While I doubt it is as clean as the current USA system. I also doubt it is as corrupt as Ukraine. Overall the numbers seem reasonable given the comparable cost of airline tickets. The books may not be totally accurate; but, they cannot be off by a huge amount due to material mis-statements.

Have a great day,
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 4:26 pm

It is the unfortunate reality of globalization, consolidation and domination in the auditing marketplace. I will give my observation, 25+ years back India used to have an institute to certify Chartered Accountants. Not sure if it still exists. It used to take 4-6 years of rigorous training and screening to become a CA. We were the only a handful of IT experts in a country not many have seen a computer, including auditors. We used to think this old guy about to retire, doesn't know how to use a computer, depends on us to generate reports, what can he find? Truth be told by the end of the audit, both IT and finance departments were the ones in shock, reading the write-up.

When I go to India now, most working for Audit-4 are not qualified to do accounting, let alone auditing. That is the reason there are ever bigger scams come out year after year.

Experienced auditors can sniff out, even if someone trying to hide.
All posts are just opinions.
 
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PW100
Posts: 4109
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 5:05 pm

ScottB wrote:
PW100 wrote:
If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .


I would trust the AA/DL/UA results more not due to the auditors, but due to more significant post-Enron civil and criminal penalties in the U.S. for cooking the books.


Right. US GAAP is so much better than IFRS . . .

Thing is, that EK has no real reason for cooking the books, as their funding does is not heavily depend on their stock value (not to mention corporate bonus practices).
Last edited by PW100 on Sat Nov 09, 2019 5:08 pm, edited 2 times in total.
Immigration officer: "What's the purpose of your visit to the USA?" Spotter: "Shooting airliners with my Canon!"
 
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PW100
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 5:06 pm

smartplane wrote:
PW100 wrote:
ScottB wrote:
Enron's results were audited, too. WeWork's numbers were audited by EY (the auditor, not the airline).


If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .

Global auditing firms now run teams for commercial aviation, as they do for finance, insurance, manufacturing, etc. They also peer review these teams. Higher standards than current Boeing and FAA safety culture.



Seems Mr. ScottB is not convinced . . .
Immigration officer: "What's the purpose of your visit to the USA?" Spotter: "Shooting airliners with my Canon!"
 
mjoelnir
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 5:24 pm

ScottB wrote:
PW100 wrote:
If you don't trust these EK results because they were audited by EY, KPMG, PWC (and/or other Global Auditors), then surely you must not trust the AA, DL, UA results either as they'd be using the same Global Auditers . . .


I would trust the AA/DL/UA results more not due to the auditors, but due to more significant post-Enron civil and criminal penalties in the U.S. for cooking the books.



The USA was one of the driving forces behind the IFRS project, insisting on strict standards. Than it came to the point to take up the IFRS standard in the USA. The protest by the different industries was vehement. IFRS does just not give the same scope for creative accounting as the US GAAP does.
 
Sokes
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Re: Emirates Group announces another year of profits

Sat Nov 09, 2019 6:10 pm

2175301 wrote:

This post identifies what the Auditors can and cannot do. Auditors cannot see or likely identify material mis-statements. They can say if the statements they are given appear correct in accordance with auditing standards.



Maybe your wife's company sells some products without bills. In which case there is black money to bribe and an auditor gets suspicious.
I believe however that multinational companies give "advisory" contracts to lobbyists.
E.g. 1 million $ to lobbyist. He pays 30% tax. After that he pays 500.000 $ bribe and keeps 200.000 for himself. Don't believe the numbers, it's about the principle.
It's all in the books. This form of bribe is legal for the multinational in it's home country as long as the bribe is not paid in that country.

The ruler of Dubai may tell a business friend to give Emirates a cheap service. In exchange he gets an overpaid service from a government company.
If we can exclude that Airbus/ Boeing's military sector doesn't subsidize the civilian airliner sector, we can complain. Otherwise rather not.
Are Emirates tickets so cheap or why is it always assumed that they have an unfair advantage?
Why can't the world be a little bit more autistic?
 
dtw2hyd
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Re: Emirates Group announces another year of profits

Sun Nov 10, 2019 1:31 am

Sokes wrote:
why is it always assumed that they have an unfair advantage?


Allegedly,
Government built EK dedicated infrastructure.
Undisclosed arm length transactions. Does it pay airport fess,fuel,catering fees at home base? Market rate/discounted/waived

I don't believe it has any labor cost advantage with 100,000 group employees.
All posts are just opinions.
 
Sokes
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Re: Emirates Group announces another year of profits

Sun Nov 10, 2019 8:46 am

dtw2hyd wrote:

Does it pay airport fess,fuel,catering fees at home base? Market rate/discounted/waived

I don't believe it has any labor cost advantage with 100,000 group employees.



Funny: Wikipedia states 60.282 employees plus a source (annual report). When I checked the source it says 105,286 employees.
Lufthansa has 135,534 employees, but 2,7 times the revenue. So you have a point here.

Are desired slots at congested times at Frankfurt airport allotted by auction? Let's assume Lufthansa gets preference: is it fair?
Auctioning slots at London Heathrow should be fun.

What makes you think that Emirates gets fees discounted? Are airport fees for other airlines unusually high?
If a plumber works 1,5 hours for you, but charges only one hour, why would you complain?
Why can't the world be a little bit more autistic?

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