Emirates targets double-digit growth

The Emirates Group is anticipating double-digit growth for the 2010/11 financial year, as it continues to expand operations and add new aircraft to its order book after a record year that saw profits quadruple.

Speaking at a press conference yesterday, Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group and President of the Dubai Civil Aviation Authority, said: "Emirates currently has $48 billion (Dh176bn) worth of aircraft on order, with eight being delivered this year. We are also planning to make some new announcements in eight weeks' time."

While Sheikh Ahmed refrained from committing if the new order would include the flagship A380 aircraft or the fact that the announcement would be made at the upcoming Farnbourough Airshow in the United Kingdom that starts on July 19, he did say the group need not worry about fulfilling commitments or raising money, as the "cash position is excellent with $3.4bn available at the end of March". He added that banks were queuing up to provide financing for their aircraft purchase.

A profitable year

Emirates airline saw its net profit surge to $964m in the year ending March 31, a 416 per cent jump from the previous year's plunge of $187m, due to high oil prices and tumbling demand for air travel amid the global economic downturn.

Yet, while the rest of the aviation industry continued to feel the heat of the recession, Emirates bucked the trend with Sheikh Ahmed stating: "We have recorded exceptional profitability despite the fact that it has been one of the most challenging of years for the airline business. The recession saw price cutting, bankruptcies and shrinkage of returns for the entire sector. However, the Emirates Group saw its total revenue increase to $12.4bn, with a net profit of $1.1bn or a 248 per cent rise."

He added: "The net profit for the airline stood at $964m, a 416 per cent increase from the previous year's $187m."

Sheikh Ahmed said the main driver behind this record profit was cost savings, limiting staff expenditure and increasing productivity. However, he said the company has resorted to freezing recruitment, while some staff had to take unpaid leave as part of cost containment.

Meanwhile, Emirates' President Tim Clark said: "Emirates cut its operating expenditures by three per cent compared to last year by reducing staff costs and lower fuel prices. We are also looking to cut costs by a further five per cent this financial year."

Growth curve

Talking about the airline's capacity increase, Sheikh Ahmed said: "We increased capacity by 17 per cent last year, with the carrier transporting 27.5 million passengers during the period, an increase of more than 20 per cent over the previous year's 22.7 million."

He added: "This increase in passenger numbers is attributable not only to our position at the centre of the new Silk Road between

the East and the West but also to our commitment to increasing our network and service standards… Dubai has become a good central location for those from India and China."

Looking ahead, Sheikh Ahmed was noncommittal about new destinations that the carrier could fly to in the near future, but he did say that Emirates was not looking at joining an airline alliance any time soon.

"When we first drew out our expansion strategy, we realised joining an airline alliance could slow our growth," he said.

And about the possibility of an initial public offering for Emirates in the near future, Sheikh Ahmed said: "We are ready but the decision lies solely with the government, and once they give the go-ahead, we will set things in motion."

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