Subscribe Free
in Business & Finance

Emirates’ performance proves it can withstand economic challenges, says GlobalData

Posted 15 November 2019 · Add Comment

Following the news that Dubai-based aviation company Emirates Group reported a profit of AED1.2bn ($320m) in the first half of its current fiscal year, which ends in March 2020.

 

Jennifer Aguinaldo, transport and technology editor at GlobalData, a leading data and analytics company, offers  her view by saying:

“The current fiscal year appears to offer better profitability prospects for Dubai-based Emirates Group, barring no major escalation in the region’s geopolitical landscape and a major misstep in international trade and foreign policies.

“The group’s net profit in the first half of fiscal year 2019-20 stood at AED1.2bn ($327m), which is 8% higher than the previous reporting period and equivalent to more than half (52%) of its total net profit in the previous entire fiscal year. Notably, the aviation group delivered this profit amid a challenging environment, which saw a 2% reduction in overall revenue of AED53.3bn.

“Operationally, the 45-day closure of one of Dubai International Airport’s two runways in the first half resulted in capacity and fleet reduction – 7% and 5%, respectively – which meant the airline carried fewer overall passengers during the period.

“‘Unfavourable currency movements’ wiped off AED1.2bn from the aviation group’s profit, which offset the AED2bn gains made from a 13% reduction in its total fuel bill due to lower jet fuel prices and reduced capacity.

“A major reshuffling in key commercial and senior management positions also took place during the first half. In early September, Emirates appointed Adel al-Redha, who has been with Emirates for 31 years as chief operating officer; Adnan Kazin as chief commercial officer; and Sheikh Majid al-Mualla as divisional senior vice-president of international affairs. Further reshuffles and appointments ensued, which resulted in 42 United Arab Emirates (UAE) nationals being appointed to key leadership roles by the end of the first half. 

“Nevertheless, completed renovation works on Dubai International’s southern runway and a busy holiday season in the second half point to a strong possibility that the aviation group could register a profitable full fiscal year. Indeed, despite competition and currency upheavals in certain regions, it is notable that Emirates carried 8% more passengers to its main hub in the first half, which means the tourism and recreation facilities in Dubai and the UAE will likely continue to draw visitors and tourists.

“On the downside, it is expected that geopolitical tensions will inevitably have some impact on business performance, with recent developments in Lebanon, Iraq and Syria pointing to a potential escalation. There will also be a 12-month wait-and-see period as the US heads to a presidential election, where increased unpredictability in policies towards the Middle East, particularly on Iran, will be closely watched.

“Such an environment will test how Emirates’ revamped leadership team will respond to ensure the group’s fiscal performance does not deteriorate.”

Other Stories
Advertisement
Latest News

The airline industry is expected to remain cash negative throughout 2021

The International Air Transport Association (IATA) has released new analysis showing that the airline industry is expected to remain cash negative throughout 2021.

Emirates and Dubai Health Authority to create digital verification of COVID-19 medical records

Emirates and the Dubai Health Authority (DHA) have signed an MoU which aims to position Dubai as one of the first cities in the world to implement digital verification of traveller medical records related to COVID-19 testing and

TAV Airports served 27 million passengers in 2020

Turkey’s TAV Airports has announced its full-year 2020 financial and operational results revealing it served 14.3 million domestic and 12.7 million international passengers in 2020, with a total of 70% decrease compared to the

Embraer’s Phenom 300 becomes world’s best-selling light jet

For the ninth consecutive year, Embraer’s Phenom 300 series has become the world’s best-selling light jet according to numbers released today by the General Aviation Manufacturers Association (GAMA).

Flydubai expands its operations to Romania

Flydubai has launched flights to Cluj-Napoca in Romania. The airline will operate twice-weekly flights between Dubai International (DXB) and Avram Iancu International Airport Cluj (CLJ) starting from 20 March 2021.

IDEX: Collins Aerospace targets Middle East fighter seats

Collins Aerospace is looking at upgrading the F-15 and F-16 aircraft in the Middle East with its next generation ACES 5 ejection seats.

WDS SK2601090322
See us at
Aviation MENA 2021DAS21_BTWorld Defence Show 2022Aviation Africa 2021 BTNNArab Aviation Summit BT1002230321