The Emirates Group, which comprises Emirates Airline and Dnata, has declared a 13.5 percent increase in net profits to $164 million for the financial year 2001/2002, flying in the face of recent industry trends. Total Group revenue increased by 12.9 percent to $2.1 billion in the year ending March 31, 2002, compared with $1.9 billion in the previous year.
Of the Group net income of $164 million, Emirates' airline profits rose 11 percent from $115 million to $127 million. Dnata returned a net income of $37 million, up from $30 million for last year.
Referring to the recent industry trends following the tragic events of September 11, Group Chairman Sheikh Ahmed Bin Saeed Al-Maktoum 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."
"In a normal year, our profitable results would have been a superb achievement; in 2001/ 2002, it is exceptional and probably unique," he added. However, the chairman pointed out that while 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 allegations about hidden subsidies—despite publication of transparent, audited annual accounts—may affect government decisions on offering traffic rights to Emirates. "This hits us in a vulnerable spot because we ourselves have no such protection at all," said Flanagan.
A "business as usual" strategy, in the aftermath of September 11, led to an overall growth in airline passenger numbers by 18.3 percent to 6.8 million, with seat factor down slightly from 75.1 percent to 74.3 percent. Available seat kilometers increased by 19.7 percent, with costs up by only 13.6 percent, reflecting improved productivity. Emirates SkyCargo reported an 8.7 percent improvement in revenue, with cargo tonnage up by 19.5 percent to 400,569 tons.
"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,” noted Flanagan.
Emirates is on schedule to launch direct, non-stop service to North America when its New York-Dubai route opens in 2003. Emirates' network grew to 57 destinations in 40 countries with the start of operations to the Indian city of Hyderabad and Morocco's commercial 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 percent increase over last year. Handling freight operations at the airport, Dnata Cargo registered a record 10.9 percent increase in tonnage to 635,298 tons. Dnata Agencies, General Sales Agent (GSA) for more than 30 international airlines, moved from their downtown offices to a new Dubai Airline Center on the Sheikh Zayed Road. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
