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Dubai’s flagship carrier Emirates will deliver exceptionally good results for 2022-23, thanks to the airline’s approach to bringing its fleet back as quickly as possible after the pandemic as well as revenge travel and tourism witnessing a boom globally, said its president.
While speaking during a panel discussion, Sir Tim Clark said the aviation industry has benefited from surprising changes in trading conditions internationally and domestically since the pandemic ended.
He added that the airline started working as soon as it could after the pandemic and that helped it to get into good shape and “there is no notion that we will stop or slow down.”
Highlighting the strong demand, he added that they didn’t subscribe to the idea of demand remaining the same as before the pandemic.
“We moved quickly and were first to bring the fleet back in the air, therefore, results are exceptionally good this year. And credit goes to the team,” Clark said during the second day at the Arabian Travel Market 2023.
The airline is expected to announce full-year results in the coming week.
Emirates airline profit for the first half of 2022-23 hit a new record of Dh4 billion, compared to last year’s loss of Dh5.8 billion. Despite an unfavourable currency exchange environment, Emirates revenue, including other operating income, of Dh50.1 billion was up 131 per cent compared with the Dh21.7 billion recorded during the same period last year.
“The airline’s strong turnaround performance is driven by strong passenger demand for international travel across markets and shows the airline’s ability to plan ahead to meet the demand, activate capacity, and attract customers with its high-quality products and value proposition,” it said in its first-half report.
Aviation industry sources say that Emirates will most likely report a record profit for the full year as well.
Clark said Emirates was able to move quickly and deploy resources despite all problems of borders closing and opening after the pandemic.
“By autumn of 2021, we were up there. As a result of that, we were able to get the resources of the business back into place and get production where it needed to be. At one point we were bleeding $250-300 million cash a month with no income. But we were not going to sit there. So we stabilised cashflow and grew very fast after that,” he said.
While replying to a query about the reopening of the Chinese market after the pandemic, he said: “We are not there where we used to be but we are getting there rapidly.”
China reopened its borders for international travellers in March, three years after the pandemic.
He said the travel sector is highly resilient and demand will continue to be robust.
“In the last 30 years, the leisure segment has grown, and it is still a huge opportunity. Leisure will grow more and more going forward. Demand will boom with leisure and hospitality seeing see a big uptake in the next five years. Saudi will have 100 million tourists by 2030 and that is an enormous number of people going in one country. If you look at what happened in Dubai last year, it already exceeds pre-pandemic numbers,” he said.
He said a number of European airports struggled with the pandemic and were impacted by government interdiction of what may or may not happen to the airline industry and they were also caught short by the resurgence of demand.
Emirates president expects aircraft production and delivery issues to be sorted out by the middle of next year as like everybody else, aircraft manufacturers released fairly late that they would face supply chain challenge after the pandemic.
Emirates president said the aviation industry will expand substantially, driven by demand from India and the Middle East region over the next 10 years.
“Demand for service for Gulf carriers and others is very strong on the India routes. On top of that top, Saudi Arabia has announced huge plans never seen before such as $2-3 trillion investments. They also aim to woo 100 million tourists by 2030, so you need not one but 10 airlines to do that,” he said, adding that newly-launched airlines in Saudi Arabia such as Riyadh Air are not a threat to Emirates.
“Emirates spend 35 years building brand, products and network to be the best in class. We are flattered that others emulated our models. If they want to be where we are, they have to be seamless and bring wonderful pieces of best practices such as a fully automated process of transiting people from Riyadh to other parts of the world,” he said.
“Paradoxically, the more carriers coming to play, there are more chances of them being profitable.
He further added that India, which is suddenly going through revitalization, need to change a lot of process of thinking to get up to speed with the likes of Emirates. “It can be done, it takes money and best-in-class human capital to get the job done,” he said.
-waheedabbas@khaleejtimes.com
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