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Emirates airlines beats sceptics with profitable results

Emirates airlines has beaten the sceptics and made a profit of AED 982 million (US$ 268 million) for the financial year ended March 31, 2009, admittedly down 80.4 per cent over last year’s record profits of AED 5.0 billion ($1.37 billion), while revenues rose 9.9 per cent to AED 44.2 billion ($ 12.0 billion) from AED 40.2 billion ($ 10.95 billion) the previous year.

Emirates’ Chairman Sheikh Ahmed also reinforced the airline’s plans to continue taking delivery of 18 new aircraft in the coming year, saying

“We will progress with our fleet and route expansion plans. With our strong business fundamentals and track record, we have had no problems securing financing for our growth. In fact, to date we have already secured financial commitments for over half of our aircraft deliveries in the coming year.”

In 2008-09, the airline’s passenger fleet expanded with the delivery of four Airbus A380s, ten Boeing 777-300ERs, and six Boeing 777-200LRs. At the end of the financial year Emirates’ fleet reached 132 aircraft, including eight freighters, boasting an average age of 64 months.

Read my related article “Emirates expansion goes for the jugular”

At the end of the year, the total number of aircraft on Emirates’ order book, excluding options, was 161 aircraft, worth approximately $52 billion.

During the year, the airline launched passenger services to four new destinations – Kozhikode (Calicut), Guangzhou, Los Angeles and San Francisco – and increased frequencies onto existing routes in high-demand markets. In India, Emirates is muscling out other foreign carriers with it’s significant expansion.

Passenger Seat Factor, at 75.8 per cent, was a strong result considering a 13.4 per cent increase in seat capacity measured in available seat kilometres (ASKs). Overall traffic (passenger and cargo) increased by 7.7 per cent to 15,879 million tonne kilometres as compared to the overall capacity increase of 10.5 per cent to 24,397 million tonne kilometres (ATKs).

Yield improved by 8.4 per cent to 256 fils (69.8 US cents) per RTK (Revenue Tonne Kilometre), up from 236 fils (64.4 US cents) in 2007-08 marginally ahead of growth in unit costs that grew by 8.2 per cent from higher fuel and operating expenses. These helped to improve the break even load factor down to 63.9 per cent from 64.1 per cent last year.

Emirates continued to enhance its products in the air and on the ground, completing the refurbishment of its Boeing 777 classic aircraft with its new First, Business and Economy Class seats, as well as the latest in-flight entertainment system with over 1,000 channels on-demand.

On the ground, Emirates Airport Services were highly involved in the development and opening of Terminal 3 at Dubai International. At JFK, Emirates Airport Services completed the construction of a customised aerobridge providing direct access from the Emirates Lounge to its aircraft. New lounges at Beijing, Dusseldorf, Johannesburg, Mumbai and Zurich airports were opened, taking the number of lounges in the Emirates network to 20 with three more planned.

Skywards, Emirates’ frequent flyer programme, welcomed its 4 millionth member over the course of the year with a new member enrolling every 41 seconds.

Emirates SkyCargo produced a growth performance despite high fuel prices in the first half of the year and the global economic slump which had significant impact on world trade and air freight. The division carried 1.4 million tonnes of cargo, an improvement of 9.8 per cent over the previous year’s 1.3 million tonnes helping revenue to increase by 14.8 per cent to AED 7.7 billion ($ 2.1 billion), up from AED 6.7 billion ($ 1.8 billion) in 2007-08. Cargo revenue contributed 19 per cent to the airline’s total transport revenue.

Emirates SkyCargo took delivery of its first 777 freighter at the end of the financial year, bringing the total freighter fleet to eight aircraft – including seven 747Fs, and the new 777F operated by Emirates. In all, Emirates SkyCargo carried freight in 132 aircraft, including belly space in the passenger fleet, to 99 cities on six continents.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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