Rabat – Emirates airline has recorded a whopping 82.5 percent in its annual profit, its first drop in five years. Interestingly, however, there is still reason to remain positive.
The Dubai-based airline is blaming what they are calling a series of “destabilizing events” for the unprecedented loss. The company’s chief, Sheikh Ahmed bin Saeed al-Maktoum noted events including Brexit, a series of terrorist attacks suffered by European countries and US travel restrictions from Middle East countries as having an overall negative impact on air travel.
The “relentless rise” of the US dollar is also being cited as an issue since that rise occurred directly against currencies in Emirates’ key markets. The company was also subjected to extreme pressure to lower seat prices in order to be more competitive.
As a result, the airline recorded a drop in profits from USD $1.9 billion in the last fiscal year, to UD $340 million, a dizzying drop of 82.05 percent. It didn’t help that the airline added more seats than it could fill, which lead to a drop in average yield per customer. This, in turn, resulted in a 6 percent increase in their fuel bill.
In an interview with Al Jazeera, editor-in-chief of Arabian Aerospace magazine, Alan Peaford, explained part of the problem; “There’s been an overcapacity in the market-Emirates are getting 75 percent of their seats filled but they are putting more capacity in with more aircraft.”
Maktoum expects the “year ahead to remain challenging.” There is, however, reason to remain positive. Despite the losses suffered, Emirates still managed to service a record 56.1 million passengers, representing an increase of 8 percent over the previous year.
In spite of this, however, Peabody remains certain that Emirates’ plans for expansion will move forward, unhindered. In fact, for Peabody, it’s a natural business move for the airline to make. “They will need to continue to invest because always in the aviation industry we have peaks and troughs- and Emirates in the past have shown to be incredibly wily and buying airplanes in a trough.”
