Emirates grapples with travel blues

EMIRATES, the Middle East’s largest airline, said yesterday that its profits had fallen by more than 80 percent to $340 million (R4.6 billion) last year as it grappled with a slump in demand linked to a range of headwinds, from political upheaval and terrorism in Europe to tougher travel restrictions to the US.

Emirates Group, which operates the airline, said overall profits for the company were down 70 percent to $670m.

In its earnings report, the company said profits were affected by heightened immigration concerns, terror attacks in European cities as London and Paris, an attempted military coup in Turkey and uncertainty caused by Britain’s vote to leave the EU. It also cited a strong US dollar against currencies in major markets.

Challenges

Specifically, the airline’s profits dipped to 1.25bn dirhams (R4.6bn) compared to 7.13bn dirhams the year before. Its earnings report covers the period of April 2016 to the end of March 2017.

The company said that one of the biggest challenges it faced came as a result of actions taken by the US government to heighten security vetting of travellers and restrict certain electronic devices, including laptops, in aircraft cabins. Dubai was one of 10 cities in Muslim-majority countries affected by a ban on laptops and other personal electronics in carry-on luggage aboard US-bound flights.

This had a direct impact on consumer demand for air travel into the US, one of the airline’s biggest growth potential markets. The airline said it quickly introduced consumer-friendly services such as complimentary laptop loans on flights to the US.