Emirates expects to reap over $1 billion in profits this year


Emirates Airline is on track to reap more than US$1 billion (Dh3.67bn) in profits this year and has hinted strongly it will announce a multibillion-dollar order for more Airbus A380 superjumbos today.

The week is looking to be critical for the largest Arab carrier as it also acknowledged it hoped to finalise the sale of its stake in SriLankan Airlines within the next few days.

Tim Clark, the president of Emirates, did not challenge reports yesterday that his airline was planning to today announce a $10bn order for as many as 12 A380s and another 18 options.

Mr Clark was speaking on the sidelines of the International Air Transport Association’s annual meeting in Berlin, and is expected to make the purchase announcement at today’s opening day of the ILA Berlin Air Show.

Emirates is already by far the world’s largest customer for the world’s biggest passenger aeroplane, with 58 on order. The planes cost more than $300 million each at list prices, although Emirates is thought to have received significant discounts with its bulk orders.

Mr Clark said the airline had taken the expense of flying one of its existing A380s to the airshow for display.

“All I can say is, the airshow starts tomorrow, we have an A380 there – be there,” he said. Mr Clark’s hints reignited speculation of a big plane order after initial media reports were thrown into doubt by Airbus.

Emirates has long been expected to top up its already formidable order book, which stands at more than 150 wide-body aircraft worth more than $40bn, after surviving the global downturn better than expected.

The airline earned just under $1bn in profits for its 2009-2010 fiscal year to the end of March. Profits “will be bigger than that this year”, Mr Clark added, saying passenger and cargo demand remain strong. “We will exceed it. We are well ahead [of our forecasts] already.”

The profits are being driven by the carrier’s extensive network of more than 100 connections that has enabled it to reach a “critical mass” of demand even during down periods, according to Peter Harbison, the executive chairman of the Sydney-based Centre for Asia Pacific Aviation.

“It is difficult to contrast anyone against Emirates,” Mr Harbison said.

The airline has a focus on connecting previously unconnected city-pairs around the world through just one stop in Dubai – such as Rio de Janeiro and Tokyo, for example.

This week, the Dubai airline could also finally end its only foray in foreign airline ownership when it disposes of its 43.6 per cent stake in SriLankan.

It has been negotiating with the Sri Lankan government since February.

Sri Lankan officials have quoted a figure of $55m and that figure is “not far off”, Mr Clark said.

“I hope between now and Friday the Sri Lankan government will have signed of off on it,” he said. “We are close. It is all done and it’s in their court. We have the share certificate ready to be passed over to them.”

The potential A380 order could come as a surprise to some after Emirates officials had said airport capacity at Dubai International Airport, the airline’s home for at least another 12 years before it moves to the new Al Maktoum International Airport in Jebel Ali, would be a limiting factor.

Mr Clark said Emirates and Dubai Airports “just have to make more intelligent use of the space. There is a lot of work going on in that regard.”

Meanwhile, flydubai has just completed its first year, which ranks among the fastest launches for any budget carrier, with about a dozen aircraft and 19 routes.

Yesterday the Dubai Government, by decree, ordered the airline’s funding to be increased to Dh500m from Dh220m to help it continue its heady pace of growth.

Emirates has a total of 50 B737 aircraft on order from Boeing from a $4bn deal announced at the 2008 Farnborough Air Show.