The year 2004 was a tough year for the industry as a whole, with much of it still fragile from the fallout of 9/11, Sars, the Iraq crisis, and more recently, soaring fuel prices.
These comments – from Emirates’ vice-chairman and group president Maurice Flanagan – sum up the woes of the airline industry, which he feel, have been oversimplified and distorted. Industry-wide losses since 2001 now amount to around $35 billion, but the estimated global airline loss of around $5 billion for last year was distorted by losses of $9 billion made by very large US carriers. They were beset by socio-economic crises that have not troubled the rest of the world to anything like the same extent, he says.
But, on a positive side, Flanagan says the global outlook for this year is brighter.“Already last year, international passenger traffic grew 15.3 per cent over the total for 2003, while cargo was up 13.4 per cent,” he points out. “Going east from the US, there are many bright spots. European carriers are picking up. Lufthansa, Air France-KLM and British Airways all announced positive third-quarter 2004 profits, and further east it looks better still. Cathay and Singapore Airlines have fully recovered from the effects of Sars, and year-in year-out are very profitable businesses. Qantas remains healthily profitable, and a number of low-cost carriers have started up, based on the Singapore open skies hub, where the Singapore government has provided a low cost terminal.”
Noting that Emirates has shown a profit in every year of its existence except the second since its founding in 1985, Flanagan said the airline today has 100 aircraft on its order book, worth some $30 billion in list prices. “We have grown in capacity from Day 1 at an annual average of more than 25 per cent and plan to do so for many years,” he commented.
He characterised Emirates as “not a very big airline, 14th in order of size according to Air Transport World, but moving up fast and operating only big aircraft,” and pointed out that Emirates’ net profit for the six months to September 30, 2004 increased by 41 per cent over the same period in 2003 to a record $236 million. (Emirates’ financial year runs from April 1-March 30.)
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