The Annual Report of the Group, which comprises Emirates Airline and Dnata, was announced at a press conference at its Dubai hub today (Tuesday 30th April 2002) by Group Chairman, HH Sheikh Ahmed bin Saeed Al-Maktoum.
In his review of the year, Sheikh Ahmed said: “In a normal year, our profitable results would have been a superb achievement; in 2001- 2002, it is exceptional and probably unique.”
Total Group revenue increased by 12.9 per cent to Dhs7.8 billion (US$2.1b) in the year ending 31st March 2002, compared with Dhs6.9 billion (US$1.9b) in the previous year.
Of the Group net income of Dhs603 million (US$164m), Emirates` profits rose 11% per cent from Dhs421.8 million (US$115m) to Dhs468.2 million (US$127m). Dnata returned a net income of Dhs134.8 million (US$37m), up from Dhs109.5 million (US$30m) for last year.
Referring to the recent industry trends following the tragic events of September 11, Sheikh Ahmed commented: “This notoriously cyclical industry of ours was already at the bottom of the cycle at the beginning of September 2001. The horrors of September 11 plunged it into chaos. We were not immune.”
However, the chairman pointed out that whilst it would have been forgivable to give up on the prognosis for another profitable year, Emirates did not. “We only briefly and marginally reduced our schedules, redoubled our efforts in our markets, severely restrained costs, and kept to our plans,” he said.
“This meant lending our full support to the Government of Dubai`s massive infrastructure plans to develop commerce and tourism and attract 15 million annual visitors by the year 2010 - a strategy in which we have the utmost confidence. Consequently, at the Dubai Air Show in November, we announced orders for $15 billion worth of new aircraft, covering 22 A380 Super Jumbos (with 10 options), 25 Boeing 777s, eight A340-600s and three A330-200s, in addition to the six A340-500 very long-range airbuses (with 10 options) already on order,” added Sheikh Ahmed.
Maurice Flanagan, Emirates` Group Managing Director, brought up an issue of concern to Emirates in his review of the year, saying that ill-informed allegations about hidden subsidies (despite publication of transparent, audited annual accounts) may affect government decisions on offering traffic rights to Emirates.
“This hits us on a vulnerable spot because we ourselves have no such protection at all,” said Mr Flanagan. “The Government of Dubai, in the promotion of Dubai`s economy, sensibly maintains an Open Skies policy. We are therefore subject to unlimited foreign competition in our home market. In these circumstances, we have to be smart to survive, and I am happy to say that we do much more than survive.”
A bold “business as usual” strategy, in the aftermath of September 11, by Emirates` sales teams network-wide, achieved excellent sales figures in the last quarter, especially in securing business from competitors who had cancelled or suspended flights to Dubai.
Overall, airline passenger numbers grew by 18.3 per cent to 6.8 million, with seat factor down slightly from 75.1 per cent to 74.3 per cent. Available seat kilometres increased by 19.7 per cent, with costs up by only 13.6 per cent, reflecting improved productivity.
Paradoxically, the upsurge in passenger traffic reduced available freight space in aircraft. However, Emirates SkyCargo reported an 8.7 per cent improvement in revenue, with cargo tonnage up by 19.5 per cent to 400,569 tonnes.
Mr Flanagan commented: “Our business suffered particularly badly from the perception that, despite the appalling evidence to the contrary, the nearer one is to Afghanistan, the greater the risk, and Dubai was falsely perceived as being very close. Traffic on most of our routes, especially our crucial European routes, fell drastically. It is, therefore, satisfying to be able to report, less than seven months later, that the Group more than recovered its equilibrium.”
Emirates` network grew to 57 destinations in 40 countries with the start of operations to the Indian city of Hyderabad and Morocco`s commmercial capital, Casablanca, in addition to extra services to Hong Kong, Tehran and Johannesburg.
Emirates` Destination and Leisure Management division, which includes the wholesale tour operating company Emirates Holidays, the Dubai Destination Management Company Arabian Adventures, and the Al Maha Desert Resort, posted results ahead of expectations, with customer numbers reaching 170,000.