Dubai's Emirates airline is sticking to its order book and expects to post a profit in its financial year despite the global economic downturn, its chairman said. Emirates, the largest customer of the Airbus A380 with 58 aircraft on order, expects to receive 17 planes from Boeing and Airbus from April to March 2010.
"We have no delays in 2009, 2010 and 2011," Sheikh Ahmed bin Saeed al-Maktoum said. "We have to be a bit cautious about what's happening, but it doesn't mean we won't carry on growing." Sheikh Ahmed said he did not think the airline had over-ordered, and was sticking to the existing plan.
"We ordered this number because it's something we need as an airline and as part of Dubai's strategy," he said. Airbus said in March it was taking very seriously issues raised by Emirates about its A380 superjumbos, and Sheikh Ahmed said its response was "excellent."
Emirates, which started in 1985 with two planes, has grown to rival carriers such as Qantas Airways and Singapore Airlines for passenger traffic between Europe and East Asia.
It has $55 billion-worth of planes on order excluding options, according to company data, and carried 21.25 million passengers in the year to March 31, 2008. It made a profit of $1.36 billion that year, but earnings fell 88 percent in the first half of 2008/9 on record fuel costs.
"We hope we will still do well this year," he said. "When asked if the airline would post a profit for the financial year, which runs from April to March, he said "Yes, we will be positive."
Earlier this year, IATA said that after years of rapid growth, Middle Eastern airlines could double their losses to $200 million in 2009 as they felt the global financial crisis. But some of the region's carriers have been reporting steady growth. Last month, Abu Dhabi-based Etihad Airways said it expected revenue to grow 24 percent to $3.1 billion this year.
Emirates has in the past sold bonds and borrowed from banks to finance aircraft acquisitions but Sheikh Ahmed said it had no problem financing 2009 deliveries. The Middle East was the only region where airlines saw any growth in passenger demand in March. Emirates' seat load factor is over 70 percent and cargo over 60 percent, Sheikh Ahmed said.
Emirates, which employs about 45,000 people, earlier this year offered cabin crew the option to take unpaid leave to help cut costs, a measure it was unlikely to continue beyond November due to its heavy delivery schedule, he said. "We didn't lay off any people and we're not planning any lay offs," he said.
Dubai, the former Gulf Arab boom town, is part of the seven-member United Arab Emirates federation that also includes the capital Abu Dhabi, home to most of the country's oil. As the financial downturn hit Dubai, speculation mounted that Emirates could either be merged with Etihad or bought by Abu Dhabi. Emirates has repeatedly denied such rumours.
Sheikh Ahmed said Emirates had never held merger talks with Etihad and now was not the right time for acquisitions. He saw room for three hub airlines in the region. "If we look at the diameter of where we are working from there are 2 billion people," he said. "The population of the world is increasing and more people travelling and we want to make this part of the world more attractive to come via transit.