UAE Industries
UAE TOURISM
Energy:
The UAE has now become the second largest energy investor in the
Middle East. It has overtaken Qatar in the field of investment in
the energy sector. The potential capital in the sector has gone up
to USD 74 billion for the country during 2011 to 2015.
The Arab Petroleum Investment Corporation has said that Saudi Arabia
may top the list of the investors in this region. It is expected to
remain the leading investor in the oil and other energy sectors. The
Arab Petroleum Investment Corporation has also added that UAE may
pump nearly USD 130 billion for the period of 2011 to 2015.
Meanwhile the total investment of the country is expected to be USD
530 billion for these four years. Apicorp has forecasted that there
will be a sharp revise in the total investment in the pan Arab
potential energy. In its previous review it has predicted a total
investment to USD 470 billion. The global energy demand has gone up
remarkably and the oil prices are expected to stabilize soon.
AIRLINES:
Emirates is world's 'largest' airline
Largest by scheduled international passenger kms flown: Ahmed
As the initial euphoria of The Emirates Group and airlines’ stellar
results dissipates into analysis, forecast and growth buoyancy for
Dubai, it is note-worthy that the airline and its management now see
the title of ‘world’s largest airline’ within their grasp.
Amid the myriad notes that formed the annual report released
yesterday here in the emirate lay this statement by Sheikh Ahmed bin
Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and
Group: "With 182,757 million available seat kilometres, we are now
the world's largest airline by scheduled international passenger
kilometres flown."
Needless to say the claim comes on the back of the Emirates Group
marking its 23rd consecutive year of profit with a record
performance of Dh5.9bn ($1.6bn) net profit, despite a challenging
business climate.
Emirates airline’s revenues grew by an outstanding 25 per cent from
last year to reach Dh54.4bn ($14.8bn). Airline profits of Dh5.4bn
($1.5bn) marked an increase of 51.9 per cent over 2009-10’s profits
of Dh3.5bn ($964m).
Mohammed hails developmental role of Emirates Group
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President
and Prime Minister of the UAE and Ruler of Dubai, has lauded the
role of Emirates Group in supporting development in the UAE.
He said in an introductory to the annual report of Emirates Group,
which includes Emirates airline and Dnata, for 2010-2011, that "we
are proud of Emirates Group, being one of our major national
corporations that supports the comprehensive development. We are
proud of the group's expertise, cumulative knowledge, efficiency and
flexibility that enables it to overcome a number of challenges,
which trailed the regional and international changes."
Sheikh Mohammed underscored that Emirates airline has consolidated
the position of Dubai and the UAE as the world's top centre, not
only for trade and business, but also for culture, sports, as well
as the strategic link for the six continents, indicating that the
advanced infrastructure of civil aviation in the country also
contributed to the global ranking of the UAE.
"We are optimistic about future of Emirates airline and its
ambitious plans. The optimism does not come from vacuum but comes in
the light of historic qualitative achievements being scored by the
group," he added.
Testimony to determination and vision
Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive,
Emirates Airline and Group, said the outstanding results in
challenging times were testimony to the airline’s determination and
vision.
“This year’s record results represent our drive to push the
boundaries of aviation, questioning the norms and advocating for
open and fair competition. Despite unforeseen challenges in the form
of political instability and shocking natural disasters, we have
managed, through sheer determination, nimbleness and quick thinking,
to produce our best ever result,” said Sheikh Ahmed.
In the face of many challenges, both political and environmental,
the group’s revenue increased by 26.4 per cent reaching a remarkable
new level at Dh57.4bn ($15.6bn). Strong revenue has been the main
driver for the group’s record financial performance. The group’s
cash balance rose substantially to hit a record high at Dh16bn
($4.4bn).
"We had a year full of growth and expansion" the head of Dubai's
flagship carrier told a news conference. Emirates made a net profit
of $954m in the previous year. “We are fortunate to be based in the
Middle East where regional passenger seats grew by 17.8 per cent
compared to a global 8.2 per cent growth,” Sheikh Ahmed said. He
added he didn’t see any need for an Emirates IPO in the near future.
Passenger Seat Factor, at 80 per cent, indicates the airline’s
highest ever, a remarkable achievement given a substantial increase
in seat capacity (Available Seat Kilometres – ASKMs) of 13 per cent.
Overall capacity, measured in ATKM (Available Tonne Kilometres),
rose 12.4 per cent to 32,057 million tonne-kilometres.
The group’s exceptional performance this year owes much to its
dexterity and ability to adapt to changing market conditions
quickly. In the first six months, Emirates was able to capitalise on
strong market demand.
With political instability across parts of the world coming to the
fore in the second half of the year, Emirates was able to swiftly
adjust flight schedules, redeploying aircraft to balance the network
and optimise revenue, the airline said.
The airline’s notable ability to drive revenue, in the midst of an
unstable business environment enabled it to partially shield itself
against a dramatic increase in fuel prices in the second half of the
year, it added.
“A clear indication of our strength, this year’s financial result
represents the tireless work of our 57,000 strong workforce.
Operating without subsidy and through a well thought-out business
model, we have, as a team, been able to confront adversity on many
levels,” added Sheikh Ahmed.
“Emirates continues to dismiss the perceived limitations of the
aviation industry, advocating for an open skies environment that
stimulates competition, an undeniable positive for the customer. The
customer is at the heart of our operations, evident in the 31.4
million passengers that flew with us throughout the financial year,
an increase of 14.5 per cent or 4 million passengers on last year.”
"With the rising fuel prices, we ended up paying nearly $250m extra,
which reduced our profit by nearly Dh1bn," said Sheikh Ahmed. "We
have come through a challenging year overall, with the volcanic
cloud, the natural disasters with the heavy snowfall in Europe and
the earthquakes in New Zealand and Japan.
"Added to that was the political instablity in the region. The world
faced these challenges and so did Emirates, but we have come
through. Especially when you look at our numbers and the fact that
Emirates announced its decision to scrap its fuel surcharge earlier
this week and reducing prices by five per cent."
Any chance of seeing an IPO in the immediate future was also
dismissed, with Sheikh Ahmed saying: "I can firmly say that there
will be no IPO issued this year or in 2012. We see no need to do so
as we are financially very stable right now."
When asked about issuing another bond, Sheikh Ahmed reiterated that
there was no issue financing aircraft as they had one year of
financing secured. He added: "Last year we went to the market to
issue a bond, but we weren't happy with the pricing so we delayed
the plan."
More aircraft on order?
Last week, Emirates President Tim Clarke stated that the airline,
which currently has 90 A380 superjumbos on order, would be eager to
increase that number to 120, however, due to space constraints here,
the carrier was unable to do so; currently, Emirates has 193
aircraft on order.
Sheikh Ahmed, however, was non-commital about the airline's plans to
order more aircraft in the immediate future. He said: "We have 193
currently on order. If we have anything new to say, you will see an
annoucement at the Dubai Airshow in November.
"By 2020, all the aircraft we have on order will be received, if all
goes well."
This year, the airline will be taking delivery of six A380s,
lauching four new routes and opening seven new Emirates lounges.
Sheikh Ahmed said they will have 169 aircraft by 2012.
When asked to confirm and if the increased space would make room for
more aircraft or would Emirates immediatly move to operations to the
new airport, Sheikh Ahmed said that he was very pleased to see phase
one of Al Maktoum Airport, but they would be unable to move
operations until the whole airport was finished. In the meanwhile,
they will work with Dubai Airports to ensure the capacity of 95m
passengers by 2020 is reached.
Competitive edge
In the recent past, Emirates' move to gain more landing rights in
Europe have been thwarted, with Berlin and Stuttgard being examples.
Many carriers have said Emirates is a threat to regional carriers
with the airline getting aid from the government in terms of fuel
subsidies.
Yet ask Sheikh Ahmed and he said confidently: "European airlines
feel we are a threat because we are giving them competition. We have
gained market share because of a good product and that is all."
Speaking about Canada, with Emirates being the centre of row and not
being permitted to have more landing rights, Sheikh Ahmed didn't
seem to bothered, saying: "It was three flights to daily. Canada is
a small market and it's not the end of the day for us. With the help
of the Canadian partnership, we can hopefully serve Canada soon. But
there is no timeframe."
Sheikh Ahmed also refused to commit when quizzed about regional
competition, saying: "I don't know who is. We are all here to focus
on the job and that is what we do."
Of the airline's expansion plans, Sheikh Ahmed said that services to
North and South America, along with Asia always has room for growth.
In fact, the airline is also indugling in a recruitment drive in
Atlanta on June 2, which is considered a major airport hub in the
United States.
While the future destinations for more flights have yet to be
revealed, Sheikh Ahmed did say that India wsa a very lucrative trade
market and more flights into the Asian country were certainly on the
agenda.
Looking ahead
Sheikh Ahmed said that for the financial year 2011-2012, they plan
to target more than this year. "We are always optimistic about the
market and we are sure the aviation industry as a whole will find it
a fruitful year."
When asked about the instablity over fuel prices, Sheikh Ahmed said:
"Fuel instablity will always be there. But when prices had reached
$150 a barrel, we had still managed to make a profit and we will
still make them next year."
On course with its financial commitments, a net amount of Dh1.8b
($500m) was used to repay a bond that matured on March 24, 2011. The
bond, listed on the Luxembourg Stock Exchange, was originally issued
in 2004 with a seven-year term.
Focusing on the theme of ‘open,’ the 2010-11 Emirates Group Annual
Report reflects on many of the group’s successes that have ensured
its continued profitability.
“Being open to competition, new ideas and most importantly the
future, ensures that we stay ahead of the game. Knowing that we
continue to delight our customers and motivate our employees is a
true measure of our success,” continued Sheikh Ahmed.
“Looking ahead we have no plans to deviate from our proven strategy
of investing in our business and focusing on core customer service.
As we continue to grow, we are ambitious enough to believe that we
can stimulate change in the aero political arena, for the benefit of
the industry and the customers that it serves.”
Operating costs, at Dh48.9b ($13.3b), were 22.7 per cent higher than
the 2009-10 financial year. This increase correlates with the rise
in fuel prices and increased activity levels in addition to an
overall growth in staff numbers and a rise in direct operating costs
such as handling, in-flight costs and aircraft maintenance.
A sharp increase of 41.2 per cent in the cost of fuel during 2010-11
at Dh16.8b ($4.6b), accounted for a sizeable 34.4 per cent of the
airline’s total operating costs, close to the record highs witnessed
in 2008-09. This increase is a direct result of the 26.5 per cent
hike in average fuel costs per US gallon, as well as higher overall
consumption due to increased capacity.
Passenger yield increased by 8.5 per cent to 28.3 fils per RPKM
(Revenue Passenger Kilometre), up from 26.1 fils (7 US cents) in
2009-10.
During the year, in line with the airlines strategic growth plan,
Emirates significantly increased its order for new aircraft, adding
32 additional Airbus A380s and 30 Boeing 777-300ERs. The combined
value of these orders is $13.4b and brings the airline’s total
number of aircraft on order at the end of the financial year to 193,
worth over $66b.
Emirates took delivery of eight new aircraft during the year
including one Boeing 777-300ER and seven of the airline’s flagship
A380s expanding the airline’s fleet size to a robust 148 aircraft.
Emirates remains the world’s largest A380 and Boeing 777 operator
with 15 A380s and 86 Boeing 777s.
Expanding its global footprint the airline launched passenger
services to six new destinations – Amsterdam, Prague, Al Medinah al
Munawarah, Madrid, Dakar and Basra – as well as increasing frequency
and capacity to a number of high-demand cities across multiple
markets, most notably the US, Asia, Middle East and Africa.
Emirates continues to benefit from a diverse revenue base, with no
single region contributing more than 30 per cent of revenues.
East Asia and Australasia led the way in 2010-11 with revenue growth
of 30.9 per cent at Dh3.7b ($1b), Europe followed closely with an
increase of 24.3 per cent at Dh2.8b ($769m) due primarily to three
new passengers destinations commencing in the region and increased
capacity through larger aircraft.
The Emirates A380 network was further developed during the year with
three new destinations; Beijing, Hong Kong and Manchester as well as
the highly anticipated re-introduction of the A380 service to New
York.
Emirates continued to invest in its product with two new airport
lounges, Shanghai and New Delhi, taking the total number of Emirates
dedicated lounges to 28. In total Emirates has invested Dh288m
($78m) in its global lounge network.
Employees were also a focus of the 2010-11 financial year with
Emirates Airline increasing employee numbers by 5.9 per cent to
reach nearly 39,000 employees, an incredible feat for an airline
that only last year celebrated its silver jubilee. Many of these new
employees fall within the Cabin Crew and Flight Deck departments on
account of the eight new aircraft delivered throughout the year; as
well as in preparation for continued aircraft deliveries in 2011-12.
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