EK results out

[Eau de Boeing]

There we have it.....
Half year profits down by 75% from last year.

[lospilotos]

And CM mentioned in a "transformation" role and instead of a Digital & Innovation role....

[ExDubai]

Emirates' net profit plummets 75% since March - Transport - ArabianBusiness.com (http://www.arabianbusiness.com/emirates-net-profit-plummets-75-since-march-652179.html)

I expected a bad result, but not as bad like that....

[Jack D]

Still a profit though ... more a reality check perhaps .

[ExDubai]

And CM mentioned in a "transformation" role and instead of a Digital & Innovation role....
Do you have a link for that ?

[Don Corleone]

Do you have a link for that ?

In the company email we received today from HH.


So obvious how they try to bury it with the results of the presidential election results 😂

[ExDubai]

In the company email we received today from HH.


So obvious how they try to bury it with the results of the presidential election results 😂
At least they have now somebody to blame for the next 4 years :}

[Kobus Dune]

The boat is sinking normally ....

[Cantbebothered]

Wow! Never expected -75% but then again they had ridiculously high profits for many years before.

[bigdaviet]

Great timing!

[fatbus]

And how many are laughing right now?

[PPRuNeUser0215]

Still a profit though ... more a reality check perhaps .

With oil at 45$, an ideal strategic location, lowest labour costs possible, weather in your favour, modern fleet ( fuel efficient ) ....I hope for EK and Dubai that they ll take that as more than just a reality check.
Seems like a pretty serious warning to me.

[Jetkopite]

I heard a rumour that EK is about 20% over staffed at the moment so lots of bouncing around at the castle :-)))) If they dont sort out these A380 orders I feel these results will only get worse over the years..

[The Turtle]

one underused 380 at 250 million usd is where to cull the bleeding...

lots of staff=250 million dollars

[Jetkopite]

If they are not careful even the 777 will prove too big for them on .certain routes. Now having over 100 A380s?? You dont have to be a rocket scientist or Muller to see the bleeding of $ where other airlines only ordered 4-5 380's for high density airports only...

[notapilot15]

Neither Bus nor Tractor are the problem, Timmy running this as a PR firm, not as an airline is the problem. Marketing spending of $3B is more than entire fleet lease cost $2.8B (240 x $1M/month x 12)

[littlejet]

qr and ey...same strategy same routes same location similar pricing...why people chose to fly them instead of EK is the answer IMO

[Jetkopite]

Neither Bus nor Tractor are the problem, Timmy running this as a PR firm, not as an airline is the problem. Marketing spending of $3B is more than entire fleet lease cost $2.8B (240 x $1M/month x 12)
I agree to a point but in years gone they spent millions on marketing and done very well, in fact our marketing department is one of the strongest dept in the airline... Problem is they havnt account for other airlines like QR expanding and hitting EK where it hurts. Their business model is better equipped to deal with a downturn with more efficient planes unlike EK where they ordered and ordered thinking the whole world will keep flying EK via Dubai... THe EK model is failing BIGTIME!!!!!

[littlejet]

maybe the new quarterback CM will figure out the cost of pilot training and multiply that number with the attrition number

[Callone]

We urgently need a narrow body between many other changes.

[fliion]

Results not a surprise, group number down -64%. CX was down -85%

The timing of the global pilot shortage is our only 'trump' card (embarrassed to be an American today btw).

Not saying we are immune from cuts but I know a lot of peeps hanging on by a thread who just can't get over that resignation line mostly because of kids situ.

Should a significant cut in package materialize - then it will be enough for many to head to Asia or home.

Don't mind being here - getting older in a hurry is one thing, getting older AND poorer in a hurry is another.

[ExDubai]

qr and ey...same strategy same routes same location similar pricing...why people chose to fly them instead of EK is the answer IMO
I'd include also TK. They have a similar business model

[Craggenmore]

Fliion. Don't be embarrassed. A non politician is exactly what you good folk need. Stay with it.

EK are BA mid 80's. Chocked to death with middle management.

[TOGA!]

Narrow Body?

Repaint the 737's on the other side of the field makes the most sense.

[Jetkopite]

Narrow Body?

Repaint the 737's on the other side of the field makes the most sense.
I agree 100% merge the two.. Best option in my opinion giving most of the regional routes to FZ and make all cadets learn their trade there before going on the big boys..

[in freedom]

Nice try to keep this under the radar while the world is looking at the Donald.

I feel sorry for all of you still there and the rest of the staff who can not leave. They treated you like sh*t when they were still making money. I am sure they will care even less for you when their house is on fire. And it will be from here on.

Their arrogance has kept them from facing reality not just on an operations level. For too long they have also ignored the saturation of the Middle East long haul market, which they successfully started. But it is undeniable that there is overcapacity between ME3, European and Asian longhaul. And the other operators have already introduced cost trimming to compete. Low cost long haul contracts at Lufthansa, 2 class at Qatar etc. Combining growth/market share and profitability at the same time will be very difficult.

Then there's the regional market where they again face increasing competition. That market has also lost its buying power due to the oil slump. Hurting tourism and Dubai economy severely. And there is dramatic writing on the wall: Saudi's defeat in their oil price strategy, their desperate drive to sell government assets and issue new bonds.

In the US the coalition against ME3 were only waiting for the election to pass by before they initiate round 2 of the fight against unfair competition. The landslide for a Republican President and Congress will fuel that protectionism. EK's financial reports will make it increasingly difficult to argue that theirs is a profitable business that can expand rapidly without subsidies.

In my personal opinion your rosters may improve but for the wrong reasons. The party is over. Having seen their poor management in the heyday I think all of you should be very concerned about their capabilities for managing a real crisis.

Building the world's biggest airport, expanding 380 fleet, w*nking about the millions of visitors who will come to Expo 2020 is Dubai World and Burj Khalifa all over again. Let's see who they bankrupt this time and how long before your shiny jets will be repainted in Abu Dhabi colours.

[notapilot15]

in fact our marketing department is one of the strongest dept in the airline...
I agree with this part. If you give $3B play money any department will do well.

but in years gone they spent millions on marketing and done very well,

Can you list their achievements, other than tongue in cheek ads, subscriptions with rating agencies, sports sponsorship and social media spending.

Didn't fill premium cabins or improve yields.

[nolimitholdem]

Agreed. I would love to see a proper cost/benefit analysis of paying a million or whatever to a former tv sitcom actress to make fun of the competition.

Of course a company needs to market its brand but EK has gone lost their minds in the last few years.

[Private Pike]

32 787s recently ordered by unidentified customer/s. Who knows?

[my salami]

32 787s recently ordered by unidentified customer/s. Who knows?

Can't be EK... otherwise it'd been 100 787😂

[JAARule]

If you thought they were vindictive and spiteful the last few years of record profits and money rolling in hand over fist, wait until they come to grips with a 75% downturn and money too tight to mention. The true colors will be showing very soon and it won't be pleasant. It's all the fault of the Lazy Pilots. AAR will be in his element.

[DCS99]

Maybe Mueller arrived just in time.

Help me understand because I'm not an accountant.

2.3 million extra passengers compared to last year same period up from 25.7 to 28 million.
But revenue basically stable. So tickets must be cheaper and/or commissions to travel agents or whoever sells the tickets has gone up.
Fuel down 10% on same period. A big saving.
Profit share down from 9 to 5 weeks. Surely a saving.

So how can Net profits *fall* by 75% to 786 million AED (28 AED profit per passenger).
Where has all that money been spent?

I make that 2.35 Billion AED gone compared to last year: 786 × 3
So where was that 2.35 Billion AED spent compared to the same time last year?
Obviously some on serving the extra passengers, some on capacity increases.
But I feel like I'm missing something obvious.

(And what was all that about cash reserves going down by 36%?
Is that investment in DWC, tractors or buses?)

[Jack D]

Debt probably !

[fatbus]

Corruption!

[Una Due Tfc]

Results not a surprise, group number down -64%. CX was down -85%

CX hedged their fuel at a stupidly high price, costing billions. What's EK's excuse?

[fliion]

Lots (I mean none)...Hyperbole.....increased comp...three new WBs a month...premium yield...poor J product...

the ME3 are cannibalizing each other.

Perhaps a mgt retreat to somewhere close by quiet and serene to figure it out...maybe "The World" would do.

[Icarus2001]

maybe the new quarterback CM will figure out the cost of pilot training and multiply that number with the attrition number

Do you have any idea of that cost? Probably not as high as many of us would like to think. Line training is cheap, only really the salary addition cost of a line training captain. What is sim for a type rating worth? Allowing for add ons maybe US$40K, this figure is an educated guess based on what sim programs around the world cost. EK have all in house with large economy of scale as an advantage.

So bring it up to US$50K for fun. If the pilot stays with the company only five years (bond?) then the cost of training them initially works out to US$830 per month. Hardly an awe inspiring figure.

I would be really interested if anyone has an even close to accurate figure for ground school and sim cost.

[Kamelchaser]

You are miles out Icarus. Many years ago, recruitment estimated the cost of replacing a Captain at around 2 million AED. That included the cost of recruiting a new joiner (FO), bringing in his family, training him, then eventually paying the costs of upgrading him to replace the experienced Captain that left.

That probably doesn't include the cost of educating the new guy's kids...given that the experienced Captain's kids were probably already through their education and no longer costing the company money. (In my case, I've claimed over 1.3million AED in education, but now I don't cost the company a dirham as my kids are over 19).

The surge in training has required us to outsource to places like the UK...can you imagine how much they're paying for that?!!!

Every time a trainee is sitting in a classroom and not out flying the line, it's a direct cost to the airline.

I have no idea what the actual cost is, but I'd say it's incredibly expensive.

I estimated recently that the cost to replace an experienced 15 year captain (3,000,000+AED nowadays) would pay for his higher salary (versus a first year Captain) for 16 years or so.

It's a no-brainer to keep your experienced staff, but that doesn't seem to fit into the equation at EK.

[donpizmeov]

What Kamelchaser said. The more quals the fella leaving has the more it costs to replace him. For example, a TRE leaves (stop cheering), they need to train a tri to be a TRE. A LTC to be a TRI. A line Capt to be an LTC. An FO to be a CAPT and then travel the world shaking trees until they find, interview, test and recruit a new FO, and then train him.

Not cheap, nor quick. Each year they sit around and guess however many ungrateful lazy pilots will leave, and throw this number into a EGIT excel programme to work out how many newbies they need to handle growth and leavers. You would think they would have had enough practice to get it right by now, but alas no. Hence Crap rosters and ****e leave. But at least they are consistent.

[Icarus2001]

Quite possibly. I was confining my cost thoughts to a new joiner FO, as information would indicate once a pilot is upgraded their propensity to leave diminshes, even more so with TRI or TRE.

Every time a trainee is sitting in a classroom and not out flying the line, it's a direct cost to the airline

Please, really, you think I do not understand that. In the same way that when they are on line they are also a cost, n'est pas?

To make it simple, what does it cost to take a new joiner to CTL status?

As far as educating your children, that cost is a given for pilot A or pilot B who replaces him/her. I am talking about ADDITIONAL costs for a pilot leaving. Can you see the difference?

Edit to add: We are basically talking the difference in fixed costs and variable depending when a pilot leaves. Ignore salary and allowances because they are fixed. Again, say a one year FO leaves (no bond say) and another joins, the DIFFERENCE is the ground school and sim costs for the new joiner and any start up costs such as initial welcome pack stuff. The education does not come in as that is the same for both.

[littlejet]

50k times 1000+ pilots that have left in 7 years is nice 50mil+ figure. Count in a cabin crew...say at 10k times 10000 that have left... engineering on top of that. Ignoring those numbers is arrogant. Above 3 groups are essential for the business. If a pilot/cc/eng does not show up for work unless immediate replacement is found the airplane will not fly. Office worker does not even has to call anybody, noting major will happen. This is what I see as a pilot...I bet at any department people will give examples of money bleeding away and there would be a manager dismissing it as a peanuts cost...add all those numbers and you will see the tremendous ignorance that is killing the EK's profits

[flaphandlemover]

It's not killing EK's profit....
It is KILLING EK.....

Ignorance and AROGANCE..... Hello Yesterday... our new slogan..

[Icarus2001]

50k times 1000+ pilots that have left in 7 years is nice 50mil+ figure.

I think you need to look at costs in relation to revenue and profit.

How much profit have they made in the last seven years? Last year was $2.2 billion.

It would be like saying look how much they spent parking aircraft at LHR and SYD in the last year. They would accept turn over as a cost of doing business but at a certain level. Agreed, reduce turn over and you do reduce costs. However depending which figures you believe, crew costs are between 12-15% of aircraft operating costs. My simple maths says if you save 10% on crew costs then you save around 1.5% of operating costs.
This is all a black art anyway, QF manufactured loss after loss hoping to get federal government attention to relax foreign ownership rules, it did not work then they make nearly A$1 billion profit.

I would suggest that pilot costs due to turnover are AN issue but not THE highest priority issue for EK management to be putting their minds towards. EK had a head start on EY and QR but they are quick learners and hungry.

Of course some pilots think we are the most important part of the operation. Until the refueller does not turn up or ATC go on strike or the company that supplies the catering trucks stops...

[BigGeordie]

Of course the refueller, ATC and catering are important but (apart from catering in Dubai) they are not under the direct control of Emirates so once the contract is negotiated not much can be done about those costs.

Pilot costs and turnover are probably not the highest priority for management and CM to be concentrating on at the moment. With everybody flying 100 hours a month we are probably the most efficient workers in the company! Still, this is a pilot network so we will discuss what is relevant to us. If half the IT department get made redundant it will not directly affect anybody on here.

Just out of curiosity, what do you think is the highest priority issue for management at the moment? There seems to be plenty to choose from.

[littlejet]

Well obviously Ek is sharing your thoughts and ignores everything players in the field are telling them...and they did a worst performance ever. Good luck

[Trader]

EK is built around silos- each department beholden only to itself. Flight ops, training, rostering, HR, accommodation, engineering, IT etc etc etc.

Now this is only conjecture on my part, based on what I can see, but it appears to me that each has its own budget and works towards its own goals with little regard to the other departments. The examples abound: flt ops has no control over rostering, accommodation does as it pleases........

So does flight ops really care how many pilots leave if the costs to replace them are borne in another department? Probably not.

Add in some cultural influences such as saving face and you see how EK came to be where it is - a big bloated monster of a company.

When it was small it was nimble. Now it takes month to years for various departments to agree on changes, plans, budgets in an environment where no one wants to stick their neck out and maintain the status quo.

Mueller is here to change the status quo! Whether they actually let him or not is another question but that will be his goal. He will rip EK apart hard and piss off lots of people while doing it. These guys know that so they go hard and fast. Hopefully, in the end, EK comes out better for it.

[Fuel-Off]

Wasn't Heir Mueller fired from MH? Or should I just shelve that as Cockpit/Galley Gossip?

Fuel-Off :ok:

[ExDubai]

Wasn't Heir Mueller fired from MH? Or should I just shelve that as Cockpit/Galley Gossip?

Fuel-Off :ok:
Nope, he resigned. Certain people didn't like when he started touching "holy cows"

Edit: One of those "holy cows" was purchasing. After digging a little bit he wanted to get rid of 15.000 suppliers. It's not normal that a caterer gets a contract for 25 years and they pay 4.3€ for a bottle of water

[ruserious]

Icarus2001 your arguments and cost estimates are way too simplistic. Your numbers look at one persons flight training in isolation, this is a small part of the overall cost of losing another pilot. At the very least it does not factor in the cost of failures of new-joiners or upgrades, not to mention the family stuff.
We may think of ourselves a bit too highly, but by the same token you should not cherry pick one cost to make an argument about how insignificant we are

[notapilot15]

It's a no-brainer to keep your experienced staff, but that doesn't seem to fit into the equation at EK.

That may be because management thinks they can still poach experienced pilots from others, not counting the cost of training a crop duster.

[glofish]

Certain people didn't like when he started touching "holy cows"

I guess he will hit the same wall here.

"Do whatever it takes. With following exception: Don't touch HH, AaR, TC and any local VP including any of their decisions. Furthermore don't touch the holy number of dugongs."

[donpizmeov]

He fecked off the tractors at the last place. Hope yet.

[luvly jubbly]

He fecked off the tractors at the last place. Hope yet.

Well 1 disappeared and another was left all over the Ukraine in very highly publicized events.
I doubt there were many bookings on MH B777 after that.

[Xiamen]

EK burned one on the ground in DXB, and it looks like that hurt bookings across all fleets.
CM also fecked off the 380, but it was not possible to get rid of them.
MH only had a few bigbusses, unlike another airline I know about.
MH is now a local Asian player. Hardly any routes to Europe. Just ordered a number of 737 MAX under the guidance of an ex FR player.
Sad to see a company reduced to a shadow of its former self.

[fliion]

EK burned one on the ground in DXB, and it looks like that hurt bookings across all fleets.
CM also fecked off the 380, but it was not possible to get rid of them.
MH only had a few bigbusses, unlike another airline I know about.
MH is now a local Asian player. Hardly any routes to Europe. Just ordered a number of 737 MAX under the guidance of an ex FR player.
Sad to see a company reduced to a shadow of its former self.

You work for EK?

[Xiamen]

No. Why? Did I give that impression?

[nolimitholdem]

"He fecked off the tractors at the last place. Hope yet."

Couldn't agree more. EK should go all 380 ops.

https://s13.postimg.org/qmic82myv/image.jpg

[Talparc]

more bad news on the way.
Fasten your belts.
Trump Presidency Could Alter Open Skies And Change Global Travel Marketplace | TravelPulse (http://www.travelpulse.com/news/airlines/trump-presidency-could-alter-open-skies-and-change-global-travel-marketplace.html)

[nolimitholdem]

Bring it on. I'd love to see Trump (aka The Human Hand Grenade) go all medieval on the ME3...no matter the outcome, it would be entertaining!

[Icarus2001]

Just out of curiosity, what do you think is the highest priority issue for management at the moment? There seems to be plenty to choose from.
Thanks for the comments, I am not arrogant enough to suggest what their highest priority should be especially since I do not see their figures. Some people have indicated pax numbers are up with a lower profit so either yield is an issue or costs too high. If stories about bloated numbers in departments are true then that would be why they have brought in CM as a fixer.
Many companies silo each business unit so it is up to the higher level management to oversee this to prevent cost shifting.

Icarus2001 your arguments and cost estimates are way too simplistic. Your numbers look at one persons flight training in isolation Yes purposefully so. My point is simply that pilot costs are not what is killing EK. All the housing and allowances are fixed so when FO A leaves and FO B starts the difference is the ground school and sim and then any one off moving costs, that is my point. I do take the point that Captains who have children out of school are cheaper than Captains whose children are still in school but that is such an imponderable, some people have no children so it cannot be accurately measured, unlike the cost to replace an FO with a new FO which should be easy to estimate.
I guessed around $50K, if EK are outsourcing the training then they will get a discount for volume so unlikely to be extortionate. Put it like this, I can fly to the US from Australia and do a narrow body type rating for less than US$25K.

[fatbus]

Maybe trump will not allow the ME3 to buy Beoing products, how would that work out for the US

[nolimitholdem]

Why would Trump not allow the ME3 to buy Boeing? He's a businessman after all. If anything, I could see the ME3 threatening to cancel orders to try and pressure (extort, really) the US to not implement protectionist policies. That would be just their style. Problem is, that leverage isn't what it once was: the days when fleets would double every couple of years are over. When's the last time everyone got giddy over some big airshow order announcement? If anything there's overcapacity now. As evidenced by EK's falling load factors and big profit drop. Sorry Timmy, can't blame this one on the price of oil or the Russian ruble.

Sure, if EK or whomever cancelled a big Boeing order it would hurt. I'm sure Boeing would hate to lose the sales to Airbus. (Assuming Airbus has the aircraft the ME3 need - I would guess EK has operational reasons for operating 160 B777's with plans to acquire the B777X?)

But if you think the US needs the ME3 as much as airlines need airplanes, you might want to take a course in logic.

[A300Man]

Al Baker and Trump are known "friends". In fact, didn't The Donald rank as guest of honour when Qatar Airways initially launched their first ever direct services to the USA some years back? (Admittedly, using an Airbus A340-600HGW).

In general terms, I don't believe Trump will ever block the ME3 from buying Boeing products. Remember the regional military connotations as well.

[fliion]

"Al Baker and Trump are known "friends".

Was Al Baker at Trumps wedding along with Hillary?

[bigdaviet]

I'm not sure it really means much but Al Baker was on Quest/CNN welcoming Trump's appointment and saying it was good for the ME3. Quest also referred to his "friend" Al Baker being friends with Trump.

[Fromagio]

Also, don't forget all the property developments that old trumpy boy is involved in, akoya etc.

[nolimitholdem]

Ahhh...it's reassuring to see WK's comments meeting their usual high standards! :ok:

I would have thought your mood would be better these days, surely the rosters have improved with the declining routes and loads?

[Talparc]

Fromagio:
The property development has nothing to do with him personally he just sold his name to promote these developments.

[DCS99]

See the Word document underneath the HQ photo

http://www.emirates.com/media-centre/emirates-group-announces-half-year-performance-for-2016-17

Nearly 104000 staff in the Group overall, up 9% in the past 6 months alone.

[notapilot15]

Maybe trump will not allow the ME3 to buy Beoing products, how would that work out for the US

Do you know how much of the $12 Billion B777X program is subsidized? $8 Billion by Washington State. Boeing never going to make a penny on B777X.

This not including heavy discounts and EXIM finance Buy 7 Get 1 Free offer on B777s.

US Tax Payers giving away planes in turn to dump capacity on us. We are deeply involved in the region and need help from actors in the region, so give subsidies.

[Desertweasel]

See the Word document underneath the HQ photo

Emirates Group announces half-year performance for 2016-17 (http://www.emirates.com/media-centre/emirates-group-announces-half-year-performance-for-2016-17)

Nearly 104000 staff in the Group overall, up 9% in the past 6 months alone.
this and pretty much this alone is the problem. Sure lots of external factors but an organisation of over 100k people can't change direction even if it wanted to, there are just too many vested interests in keeping their silo stocked up.
An enormous bloated level of dsvp, svps, evps, vps and on and on act as a huge anchor on anyone trying to change. A policy of always using internal resources instead of using outsourcing means that IT and marketing especially are massively bloated.
All I can foresee is job losses, and despite the massive top heavy makeup of all of the bouncy castle it will be the bods at the bottom that feel this

[Kamelchaser]

Groundstaff at outstations have been told any staff that leave won't be replaced. An already stretched workforce at the operational end will be even more overworked, the standard of service will drop further and we'll lose yet more customers and staff who simply can't cope with it any more.

On a recent A380 ULR returning to DXB, no pyjamas were provided for the 7 paying first class pax (forgot to be loaded ex DXB), and there was hardly any choices in the first class menu (outstation catering didn't load enough). Did anyone care? It wouldn't appear so. Treat your staff like **** and that's the level of service that the customer ends up getting. A great pity this airline has gone this way.

Meanwhile, the oxygen thieves in EGHQ continue to consume Costas at record levels while the ship sinks around them. We can only hope CM makes cuts where they can actually be afforded, and where they won't actually be missed.

[notapilot15]

Any idea why they needed 9% more employees in six months.

[777boyindubai]

To handle all the people leaving and to fill in paperwork to account for two accidents.

[fatbus]

New VP of the department of "pilot leaving dept, plus senior manager plus manager plus assistant manager plus assistant to the assistant etc etc etc
This place has become the laughing stock of the ME3

[falconeasydriver]

What a bunch of useless unaccountable morons the EK middle managers are, makes you wonder how they have managed to get this fsr.

[fatbus]

Pure luck !

[The Outlaw]

Its because of the management team that STD has put together combined with a "unique" business acumen and model that thousands of airline CEO's both past and present have completely missed.

Simple really...

[notapilot15]

Other airline financial analysts are still working hard to figure out this business model. Who don't want buy largest planes, provide best in-cabin service, have highest plane employee ratio, have planes flying allover the world half-full, yet make profits.

Unfortunately for them this business model is as elusive as a unicorn.

[Talparc]

Timy Boy is in Berlin at the moment at the Süddeutsche Economic Sumit explaining the highest EU politicians and high ranking CEO's how he managed to ruin a former great company.

[notapilot15]

Haven't seen him at CAPA summits lately, used to be a regular.

[Continental-520]

Do you know how much of the $12 Billion B777X program is subsidized? $8 Billion by Washington State. Boeing never going to make a penny on B777X.

This not including heavy discounts and EXIM finance Buy 7 Get 1 Free offer on B777s.

US Tax Payers giving away planes in turn to dump capacity on us. We are deeply involved in the region and need help from actors in the region, so give subsidies.
Notapilot15,


Whereabouts is that information found?
(Not doubting it, just want to read more.)

520.