View Full Version : Emirates Airline half year financial results
Dirigible
31st Oct 2016, 20:47
Last year Nov 5th, 2015 Emirates reported record half year financial profits, up 65% from the previous year, 3.1 bn Dirham. This year by all accounts has been more challenging. What are we to expect in a few days, good or bad?
fliion
1st Nov 2016, 01:00
Last years full yr target was 7.7bn first half achieved was 3.7bn (48% of target)
This year 7.2bn full year target. Don't think anyone is expecting close to 3.45bn (48%) this year.
Rather Be Skiing
1st Nov 2016, 03:51
Agreed fliion.
In fact, would a negative number be a real surprise?
Kamelchaser
1st Nov 2016, 05:33
My guess....1 billion AED loss for the airline. Not sure how dnata is going but the loads on many of our sectors are terrible.
I wonder if management bonuses are clawed back for the shocking job they're currently doing?
.... remember, its the pilots fault. Management have been doing a great job as usual.
Talparc
1st Nov 2016, 08:12
they will twist the numbers any ways, more wasta in progress, the ship is sinking.
2015 numbers
http://www.emirates.com/english/about/media-centre/2777007/emirates-group-announces-half-year-performance-for-2015-16
This year? Your guess is better than mine. Close the door and carry on...
donpizmeov
1st Nov 2016, 08:52
If the company wanted you to care about how they were doing they would do something to engage you.
They can't even send the pay review letter on time.
It seems we don't gain anything from large returns. Can't be much worse with a loss. Life goes on.
OnceBitten
1st Nov 2016, 09:00
Maybe this might explain where the profits are going???
Sheikh Mohammed bin Rashid Al Maktoum's billion-dollar Melbourne Cup failure (http://www.smh.com.au/sport/horseracing/sheikh-mohammed-bin-rashid-al-maktoums-billiondollar-melbourne-cup-failure-20161031-gsf1sm.html)
fliion
1st Nov 2016, 09:59
Agreed fliion.
In fact, would a negative number be a real surprise?
I'm not in that club. I suspect it will be down 50-70% from target and they will make a few hundred $m
If EK reports a loss @ $50 oil it will send a swift chill through non US industry.
Aircraft financiers & Airbus would be particularly concerned....not to mention our bean counters.
If so, hang on tight.
Xiamen
1st Nov 2016, 10:08
If EK reports a loss @ $50 oil it will send a swift chill through non US industry.
I suspect not. It will send a chill through EK.
A crashed aircraft. A poor business class product with 2-3-2 config, lack of passengers in economy despite campains with low fares, pay for your seat, etc.
Very easy to choose QR or EY instead.
Macrohard
1st Nov 2016, 18:50
New runway being worked on in DWC or whatever the new name is. All of a sudden, found some cash to inject?
DWC is almost half way between the two major centers and airlines ..... Go figure ....
ExDubai
1st Nov 2016, 18:58
New runway being worked on in DWC or whatever the new name is. All of a sudden, found some cash to inject?
DWC is almost half way between the two major centers and airlines ..... Go figure ....
Forget it, will never happen.... (as long as DXB has the money to run an airline)
Macrohard
1st Nov 2016, 21:54
Forget it, will never happen
The bank is empty in DXB.
Both airlines are now making a loss.
Oil is at an unsustainable price for the ME.
If drastic measures aren't taken right now, the place will return to the 50's in a blink.
OK, if you say so ....
notapilot15
2nd Nov 2016, 01:58
Runway is not the most expensive part of an airport but if they sink $30 Billion into DWC, they will never get it back.
Fleet wide load factor is 70% at best and they have 200+ more VLAs on their way.
Double daily A380 to Samoa is not the best way to run an airline.
The Outlaw
2nd Nov 2016, 02:04
Ex,
I disagree, I believe it is a very real possibility. It's going to be very difficult to compete with "goat airline" when they have a much more efficient fleet and a brand new airport to go with it, add to that the US3 who will keep up the subtle pressure on the bottom line of the weakest ME carrier...think its called "survival of the fittest"!
Anyway you slice it, its going to get very interesting!
The Turtle
2nd Nov 2016, 06:54
Ask yourself, given all the advantages EK currently has over worldwide legacy airlines in terms of
geographic location
one hub, one base crewing
third-world pay and benefits (for most)
no unions
new, mostly efficient aircraft
excellent marketing
Why can't they make this work, today? Of course you can make many arguments about management and their decisions, which we've debated before, however, I propose its simple really...
It's Oil.
Remember if you will when oil was 100+ plus a barrel. Worldwide airlines were losing, some hemorrhaging money. EK.......record profits. STC gave interviews saying "we just do it better". Yes, EK does do somethings better. Agreed.
However. What has been the one constant that makes or breaks an airline's bottom line. Its Oil. Always has been, always will be. (of course, I know its labor too, but not for EK...I think we can agree on that)
How then could EK make the massive proffit during high costs of oil yet now, when oil is staying at historic lows can they not double their margins like other airlines seem to be doing....
It's my belief EK doesn't pay market rates for their fuel in DXB. Seriously, what else could it be? It's not just capacity...not on this scale. The fuel price worldwide is balanced, oil is cheap, all benefit.......but why not EK? I cannot figure out what in the equation has changed so dramatically for EK but this.....
oil
Correct me if I am wrong....
It has been noted that we are taking delivery of 36 airframes 2016/17. I thought the original breakdown was 24 A380 and 12 B777. In the fleet forum email it says we are now getting 20 A380 and 16 B777 with no deliveries of A380 for the months of Feb and Mar 2017?
Has this changed?
J.
Flight&Fly
2nd Nov 2016, 07:50
Turtle, I don't know if EK pays less than market prices for oil (maybe in DXB/DWC, not in the rest of the world), but to answer your question consider this:
High oil prices quickly eat into the profits of an airline with high labour costs, so with the price at 50 returns a solid profit, at 75 breaks even and at 100 it's a blood bath (numbers are just an example)
For EK (lower cost structure) it's the same dynamic, only shifted to right (75/100/125)(numbers are just an example)
This explains why other lose money with high oil prices.
It takes a good shrink and a deep knowledge of the ME mentality to explain why EK underperforms today with low oil prices!!
TangoUniform
2nd Nov 2016, 08:47
Ex,
I disagree, I believe it is a very real possibility. It's going to be very difficult to compete with "goat airline" when they have a much more efficient fleet and a brand new airport to go with it, add to that the US3 who will keep up the subtle pressure on the bottom line of the weakest ME carrier...think its called "survival of the fittest"!
Anyway you slice it, its going to get very interesting!
And the "Goat" codeshares with American. Hubs through Miami, New York, and DFW. Opens their market through major hubs to all of Central and South America.
pilotguy1222
2nd Nov 2016, 08:53
Profit will be there, but I don't think anywhere near the targets.
EK 521 will be spun to the staff as reasoning, but every single rivit of that aircraft, piece of cargo, and passenger was fully covered by insurance. There is a real possibility that money was made from that accident because of the insurance coverage.
I mean come on!! They even found a pax who had entered a duty free raffle to get some immediate, positive news for the public.
The Turtle
2nd Nov 2016, 09:09
F&F
Yes I am only assuming that EK's fuel costs are lower in DXB
I have no idea if I'm correct. But I cannot explain how EK can lose money at $50 barrel of oil and make money 2 years ago at $100
And I don't blame them or fault them if they do get fuel cheaper in DXB.....
And why not. If you pump it out of the ground here, why should you pay market price? Ek is quasi-gvpt anyway, one hand to another
There are probably other discounts around as well, but not as apparent (and substantial) as fuel costs
And look at Delta....they purchased their own refinery.... Very smart.
The Turtle
2nd Nov 2016, 09:11
EMW was scheduled to be sold to Cathay along with other less desirable -300's in a matter of weeks when the "operational incident" occurred
notapilot15
2nd Nov 2016, 10:46
Turtle, F&F
Model was You spend as much as you want, just show profit year after year.
Now without free flow of money We cannot bankroll this enterprise forever, do your best.
It is very difficult to switch from previous business model to current one.
BTW, you cannot use the term oil money, because PR and fans will jump in fact checking Dubai has no oil, even though its finances are from neighborhood oil barons.
The Turtle
2nd Nov 2016, 11:21
Oil (fuel) in aviation is a beautiful thing. It's just another form of currency, really...
Have you ever tankered to DXB? Carried fuel to the hub?
Why do you think you did that
glofish
2nd Nov 2016, 12:37
Yes i have tankered to Dubai. There are a few (very few) cheaper places, but a lot of more expensive places i.e. In Saudi Arabia!!!!!
Forget the oil price argument, in DXB everyone pass more or less market price. Not too many tanker out of it. Why??
The Turtle
2nd Nov 2016, 12:49
to tanker into DXB from some outstations is a way to move money without a currency transfer
limited stations I agree Glo
And EK does tanker out to some stations, if the cost/benefit is there
I remember when oil prices were falling and many colleagues thought it was great for the (EK) airline.
Au contraire l suggested.
Oil prices mean oil money flowing into the coffers of this outfit.
Remember meeting many a red-neck travelling in first because of some lame job requiring his expertise in a remote oil field in butt-f*ck-no-where that EK flies to via DXB from the USofA.
These same gentlemen are now warming a seat in a bar somewhere (butt-f*ck-no-where USofA) going nowhere with no job.
Even a good mate of mine working as a manager for a large oil firm no longer travels anywhere. Used to be flying all over the world, but no more.
As for tankering....Tripoli used to be the only place guaranteed to fill 'er up son!!
So yes. I have tankered to DXB many times
May have been a way of payment as you suggest.
halas
notapilot15
2nd Nov 2016, 13:44
to tanker into DXB from some outstations is a way to move money without a currency transfer
limited stations I agree Glo
And EK does tanker out to some stations, if the cost/benefit is there
International treaties prohibit taxes and duties on foreign carriers, so EK will pay much less than the local carrier even at a remote station.
Because EK uses long haul wide bodies for turn around flights, it is possible to carry fuel for round trip. Is the additional fuel burn worth the dead weight?
A ULH example.
On IAD-DXB, UA(local carrier) pays taxes and duties on ATF, while EK(foreign carrier) doesn't. On DXB-IAD, UA(foreign carrier) doesn't pay taxes and duties so does EK because it is a tax free regime. This doesn't even include any discounts EK is getting on market price. So system is rigged to help EK.
Jack D
2nd Nov 2016, 19:30
The Turtle,s got it right I think ., not helped by a bloated , inefficient, work force in non front line positions , far too many A380,s ( sorry Airbus folks )given the present climate ( no other carrier else even comes close ) why ? & few premium pax these Days .
Possible loss of cost control oversight (skimming ) extreme sponsorships etc . I always feel we only see the tip of the iceberg , what we experience is only a microcosm of general malaise in all depts . .... oil the devils brew .! . Dxb is not as diversified as we are led to believe .
Didn't our former esteemed leader captain TCAS state at a wash up, "if an airline can not make money at 45 dollars a barrel it shouldn't be in business"
It's all gone down hill since he left, or is he still here?
notapilot15
3rd Nov 2016, 00:29
The Turtle,s got it right I think ., not helped by a bloated , inefficient, work force in non front line positions , far too many A380,s ( sorry Airbus folks )given the present climate ( no other carrier else even comes close ) why ? & few premium pax these Days .
Possible loss of cost control oversight (skimming ) extreme sponsorships etc . I always feel we only see the tip of the iceberg , what we experience is only a microcosm of general malaise in all depts . .... oil the devils brew .! . Dxb is not as diversified as we are led to believe .
Jack, but mgmt had the silver bullet. Pay PR firms to hire lots of social media workers to promote their views. Pay travel agents, bloggers and YouTubers to build and protect brand image. They are bleeding the company.
EG 95K, EK 55K for 200 planes, 30K non-core but you will never see anywhere EK has bloated workforce. Above mentioned keeps EK out of such discussion.
70% network wide load factor, but all cheers if EK sends a A380 to Samoa.
Give free upgrades to make look premium cabins full.
There is no way out of it. The day EK stops spending $3.2B to maintain image they all will turn against it.
ChocksOn
3rd Nov 2016, 01:00
When your experienced and loyal staff leave to join the competition, you know that the ship is sinking! Yep and we need another 55 A380s! Muppets!
Chinos
3rd Nov 2016, 06:31
Hope results will be better than expected when they come out in 2 weeks.
fliion
3rd Nov 2016, 11:25
Interesting view on 380 & how pax will double globally in the next 15 years. He's vested though.
Look for more 2 class based on interview logic.
http://www.nasdaq.com/video/have-airlines-lost-interest-in-the-a380--581aa3c2c4d21f5ac386f22e
EK-or-bust
3rd Nov 2016, 13:21
Lapidus looks worried......
notapilot15
3rd Nov 2016, 18:31
Poor Mark, even dumb news anchors are asking tough questions, where is my stress blankie.