Emirates warns of fuel crisis
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Emirates warns of fuel crisis
Fri "The Australian"
Emirates warns of fuel crisis
Steve Creedy
November 05, 2004
EMIRATES has echoed Qantas warnings about the potential impact on the aviation industry of a global economic downturn brought on by high fuel prices.
Emirates group managing director Maurice Flanagan said this week the airline was "very nervous" about the possibility that high oil prices could be translated into a downturn next year.
The warning comes after Qantas chief executive Geoff Dixon's recent warning that dearer oil could affect consumer spending.
Mr Dixon told the recent Qantas annual general meeting there was no definite impact but the airline could "see a faint inkling some months out of dampening in demand".
The International Air Transport Association has estimated the rise in fuel costs will push global airline losses beyond the $3 billion it originally expected.
Mr Flanagan said yesterday that Emirates had not yet seen any evidence of a downturn in the more than 50 markets it serviced.
Experts were telling him that, unlike the fuel spike after the first Gulf War, the latest increases were due to supply failing to catch up with demand.
"The fuel surcharge we all do doesn't bite anywhere quick enough or deep enough to compensate for the increased price of fuel – it just can't," he said.
"But the industry seems to be absorbing these price increases, which perhaps is giving us a message we hadn't quite understood: the global market for air travel is more elastic than we thought it was. I don't know.
"But the big worry is the effect on global business generally, not just the airlines, the global economy.
"If it has a detrimental effect, which might appear next year, that would have a bad effect on air travel."
Emirates was hit hard by fuel price rises in its second quarter after what Mr Flanagan said was a "fabulous" first quarter. He said the Dubai-based carrier was still comfortably profitable but nothing like it had hoped.
"In normal times our fuel costs would be about 12 per cent of all costs. Last week they were 25.4 per cent."
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Emirates warns of fuel crisis
Steve Creedy
November 05, 2004
EMIRATES has echoed Qantas warnings about the potential impact on the aviation industry of a global economic downturn brought on by high fuel prices.
Emirates group managing director Maurice Flanagan said this week the airline was "very nervous" about the possibility that high oil prices could be translated into a downturn next year.
The warning comes after Qantas chief executive Geoff Dixon's recent warning that dearer oil could affect consumer spending.
Mr Dixon told the recent Qantas annual general meeting there was no definite impact but the airline could "see a faint inkling some months out of dampening in demand".
The International Air Transport Association has estimated the rise in fuel costs will push global airline losses beyond the $3 billion it originally expected.
Mr Flanagan said yesterday that Emirates had not yet seen any evidence of a downturn in the more than 50 markets it serviced.
Experts were telling him that, unlike the fuel spike after the first Gulf War, the latest increases were due to supply failing to catch up with demand.
"The fuel surcharge we all do doesn't bite anywhere quick enough or deep enough to compensate for the increased price of fuel – it just can't," he said.
"But the industry seems to be absorbing these price increases, which perhaps is giving us a message we hadn't quite understood: the global market for air travel is more elastic than we thought it was. I don't know.
"But the big worry is the effect on global business generally, not just the airlines, the global economy.
"If it has a detrimental effect, which might appear next year, that would have a bad effect on air travel."
Emirates was hit hard by fuel price rises in its second quarter after what Mr Flanagan said was a "fabulous" first quarter. He said the Dubai-based carrier was still comfortably profitable but nothing like it had hoped.
"In normal times our fuel costs would be about 12 per cent of all costs. Last week they were 25.4 per cent."
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Wirgin, due in large part to the pressure exerted from the EU about subsidising airlines and the resultant unfair competition, Emirates Airlines offer their balance sheets and financial records to all to scrutinise, and as such do pay for their fuel, and as such pass on a whopping fuel surcharge onto their passengers. In fact recently when buying a ticket to the Sub Continent, Emirates were charging a 250dirham (about $100 Oz Dollars) fuel surcharge, whilst Sri Lankan Airlines was charging none.
It is true that fuel here is cheaper than Oz or Europe, whether Avgas or Car fuel, but that makes sense, since we live above a sea of oil. Here we pay more for water, milk and beer, so I guess it all evens out. But my point is Emirates Airlines doesn't succeed because of having their fuel bought for them, they succeed because they are a damn good airline (and I don't work for them).
It is true that fuel here is cheaper than Oz or Europe, whether Avgas or Car fuel, but that makes sense, since we live above a sea of oil. Here we pay more for water, milk and beer, so I guess it all evens out. But my point is Emirates Airlines doesn't succeed because of having their fuel bought for them, they succeed because they are a damn good airline (and I don't work for them).
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Blew, even if their fuel was free, they are buggered if you can't afford to drive to the AP to go. It is not the direct cost that is the big worry, it is the effect that $50/Bl will have on the world economy next year.
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SandIgger
Please note that Emirates have a number of (very) large expences due to the nature of their employee base i.e mostly expatriate such as fully run medical facilities, acommodation (or allowances) for huge numbers of staff, repartriation costs, etc, that most competitors do not have. Where your information comes from regaring unlicenced AME's I don't know but is is not accurate, neither is the reference to FTL's, they have to abide but the rules set by their regulator (DGCA) the same as every other operator does. You can request dispensations or revisions of course but that's not exclusive to EK by any means.
I think your post is a little simplistic with all due respect. I can tell you the product delivery does not come at little cost but it does come at a very, very calculated cost. Fuel price is hurting everyone at the moment, Emirates included.
Please note that Emirates have a number of (very) large expences due to the nature of their employee base i.e mostly expatriate such as fully run medical facilities, acommodation (or allowances) for huge numbers of staff, repartriation costs, etc, that most competitors do not have. Where your information comes from regaring unlicenced AME's I don't know but is is not accurate, neither is the reference to FTL's, they have to abide but the rules set by their regulator (DGCA) the same as every other operator does. You can request dispensations or revisions of course but that's not exclusive to EK by any means.
I think your post is a little simplistic with all due respect. I can tell you the product delivery does not come at little cost but it does come at a very, very calculated cost. Fuel price is hurting everyone at the moment, Emirates included.
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As long as we are clear that the Chairman of Emirates is the Chairman of the DGCA, and yes of course they abide by the rules set by their regulator (DGCA). Rules, they have just changed yet again! In the favour of, you guessed it...Emirates! By the way how long has that 8 day Brisbane waiver been waived for now...By the way I suggest anyone looking at EK think and question hard someone there and doing it. MANY CHANGES.
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SandIgger
Sorry mate, still not accurate, for example accomodation costs are for ALL crew and a good proportion of the other expatriate staff in the company, those costs are massive. The loading staff work for DNATA which is part of the group but not on the EK payrol. Do the maths on all the other items and it adds up considerably. AME's info - simply not true, EK's maintenance is FAA, JAA and DGCA audited, monitored and approved - that's first hand fact not second hand scuttlebutt. Also there's no theory about FTL compliance, only fact - of course EK apply for dispensations or changes as do plenty of other operators around the trap, there's no news there.
Sorry mate, still not accurate, for example accomodation costs are for ALL crew and a good proportion of the other expatriate staff in the company, those costs are massive. The loading staff work for DNATA which is part of the group but not on the EK payrol. Do the maths on all the other items and it adds up considerably. AME's info - simply not true, EK's maintenance is FAA, JAA and DGCA audited, monitored and approved - that's first hand fact not second hand scuttlebutt. Also there's no theory about FTL compliance, only fact - of course EK apply for dispensations or changes as do plenty of other operators around the trap, there's no news there.
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I dunno about that mr cardomum. Your putting a very positive spin on the ftl side of things. Sure other operators ask for dispensations but cast around here and find out how many waiver one day off in eight, let alone seven. Likewise expand a little on the factoring of hours as it pertains to accumulated total hours over a month or a year when it comes to augmented crew ops. I think you'll find that very few of EK's competitors can fly 150 hours in a month if they fly solely as a member of a four man crew.
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Always interesting to read posts by people who "know" EK gets their fuel for free. All I can say is, that for an airline that gets its fuel for free, they spend an awful lot of time and effort urging their pilots to use less of it.
Perhaps they're getting it for free but spend an enormous amount of effort to minimuze fuel burn to be environmentally friendly?
When considering these people who "know" everyting about EK I'm reminded of the bloke who said "you think I know **** nothing, but I tell you - I know **** all!"
Perhaps they're getting it for free but spend an enormous amount of effort to minimuze fuel burn to be environmentally friendly?
When considering these people who "know" everyting about EK I'm reminded of the bloke who said "you think I know **** nothing, but I tell you - I know **** all!"
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Ernie
Wouldn't disagree at all, just trying to put some perspective that this is not exclusively EK by any means.
Bird-on
You're wide of the mark and ill-informed, it's a great deal more than a balance sheet transfer, in fact individuals can opt for an allownce rather than taking the company accommodation.
Wouldn't disagree at all, just trying to put some perspective that this is not exclusively EK by any means.
Bird-on
You're wide of the mark and ill-informed, it's a great deal more than a balance sheet transfer, in fact individuals can opt for an allownce rather than taking the company accommodation.
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CardomumT
You may be right. EK drivers may be just a bunch of whinging girls who don't like to work hard. Lets run a poll then.
How many of the drivers watching this thread are working under a regulatory authority that will allow them to be rostered up to 1350 hrs per calendar year?
You may be right. EK drivers may be just a bunch of whinging girls who don't like to work hard. Lets run a poll then.
How many of the drivers watching this thread are working under a regulatory authority that will allow them to be rostered up to 1350 hrs per calendar year?
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Ok well I don't know anything about the inner workings of the airlines staffing, and I don't think it is relevant on this thread. An uninformed person said they believed that Emirates get their fuel for free, and that that is a big reason why they are successful. I am just saying that is not the case, and that it is a damn good airline. The reason I say that is having worked here for over 2 years now, and with constant trips back to Oz, they have always been consistently good in every aspect. Their onboard entertainment and service, is top notch, and the reservation, frequent flyer program, and genuine prfessionalism towards the passenger is really good also. This may come down to great people working for them, but whatever it is, that is a big reason why they have succeeded where more established flag carrying airlines from all over the world are going broke. Fly Qantas International one leg, and then Emirates the next one day, and compare the service and in flight entertainment, and decide for yourself.
