Emirates Group expects strong profits in 2023
AIRLINE SAW A ROBUST DECEMBER WITH FLIGHTS NEAR FULL
DWe are a dynamic airline, and we have gone through and overcome many such challenges and uncertainties in the past.”
Adnan Kazim | Emirates Chief Commercial Officer
ubai’s flag carrier Emirates expects to post strong profits in its May 2023 annual report, a top airline official has revealed.
While details of the earnings will be not be disclosed now, the airline’s Chief Commercial Officer Adnan Kazim said: “The initial indication looks positive and we are seeing the same strong six months that we have seen in terms of the results as we are progressing towards the last quarter of the financial year.”
And as far as Emirates is concerned, passenger demand shows no signs of slowing down despite larger macroeconomic concerns such as inflation and fluctuating oil prices.
He said: “We have seen a very strong December [2022] in terms of [passenger] demand. The flights were almost full, reflecting positively on the visitor numbers to Dubai, where the Emirate’s Department of Economy and Tourism monthly report showed hotels in the city were showing 100 per cent occupancy, and tourist numbers were exceeding 21 million. And this shows where Dubai is standing in terms of point-to-point traffic.”
The Emirates Group announced a record half-year profit of Dh4.2 billion in November 2022 after recording a loss of Dh5.7 billion in 2021. The group’s revenue was up 128 per cent to Dh56.3 billion.
Kazim sat down with Gulf News for a freewheeling conversation to discuss the airline’s 2023 forecast and other issues.
2023 demand forecast
Kazim said pent-up demand for travel would weather higher inflation rates that are biting into consumer spending. He noted that macroeconomic conditions such as high-interest rates, devaluation of currencies and fluctuating oil prices are increasing operational costs for the airline.
“We are seeing the effects of these factors eating into our ground handling and catering businesses …. But, passenger demand continues to remain strong, seat factors are also healthy, and most importantly, demand continues to exceed capacities compared to 2019 numbers,” he said.
Kazim also said Emirates is closely monitoring the volatile market conditions. “We are a dynamic airline, and we have gone through and overcome many such challenges and uncertainties in the past,” he said.
Kazim also said specific sectors of airline businesses are seeing a more robust recovery compared to pre-pandemic times. “The visit, friends and family [VFR] segment is performing well, and there is robust demand from families for all cabins, including the premium ones,” said Kazim.
Moreover, corporate business travel has returned to 80 per cent recovery from prepandemic times. The corporate slowdown was mainly driven by large economies, including China, being closed down. “Now that travel restrictions in China have been lifted, corporate business travel too will return to 100 per cent capacities,” said Kazim. He said the airline’s success lies in deploying its parked Airbus A380s, updating extra capacities through codeshare agreements, and service expansions.
The airline has bolstered its presence in the Asian, Australian, and European markets since January 2023 with service expansions to Brisbane, Bangkok, Taiwan, Tokyo-Haneda, Glasgow, and Birmingham. Moreover, Emirates has code-share agreements with 26 airlines extending its reach to over 5,000 cities worldwide. However, it shares its most significant and valuable alliance with sister airline flydubai. “Our cooperation with flydubai is expanding day by day. Today, we fly to 130 destinations, and flydubai operates to 115 destinations. The combination of both gives us access to 225 destinations,” he said.
Future of the A380
Airbus, the manufacturer of the superjumbo jet A380, announced plans to halt its production in 12 years from 2021. However, for Emirates, the aircraft is core to its operational model. Amid an ambitious retrofit programme where 120 planes will undergo a complete cabin refresh, including the installation of premium economy seats, Kazim said the ‘aircraft will not go away from the Emirates fleet any time soon’.