Emirates faces premium plunge but plans no dramatic cuts
Emirates Airline President Tim Clark told ATWOnline at the IATA annual general meeting in Kuala Lumpur that year-to-date passenger numbers are up 13% year-over-year but that first and business class traffic have plunged 50% on certain routes, a dynamic he believes will alter the industry's pricing regime in the long term.
Emirates reported a AED1.49 billion ($405.5 million) profit for the fiscal year ended March 31, a 72% drop from the prior year (ATWOnline, May 22). "There are difficulties to manage," Clark said.
Some 23% of EK´s approximately 11,000 flight attendants currently are on unpaid leave. "We slashed costs by 16%-20% this year. You have to be flexible, change things daily," he said. Recruitment of cockpit and cabin crew is on hold.
However, grounding aircraft is not on the agenda, he said. "Maybe if we slow down [deliveries], it would happen over a timeframe of nine months. This is marginal when you look at the fact that we have 100 A350s and 52 A380s on order." He told the Associated Press that any delay would not take place in 2009. He expects to operate 15-16 A380s by July 2010. "We will become the largest widebody fleet operator worldwide," he claimed. EK already is the largest 777 operator, ahead of Singapore Airlines.
Clark said the airline´s ability to maintain and add capacity while others are cutting back is a result of "a robust network which comes much more into play in bad times." He said EK expects summer load factors in the 80%-85% range and that it continues to look for new markets, such as recently opened Durban and Luanda. Still, slowing down is a reasonable approach considering the current climate. "After the years of massive growth, it is useful to take a breath," he told this website.
Speaking to the AP, Clark said, "I like to think that we will be in the black" this year. "We´ve got sufficient cash and we. . .can afford to take a hit because we haven´t squandered that money and we have a cash mountain that allows us to tough it through."