Emirates polishes its poor 2018-19 results

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You have to love corporate spin as long as you can read between the lines and de-mystify the verbal diarrhoea PR people spew on a daily basis. You have to wonder if they talk that way all day and just don’t know it anymore.

By the time you cut the corporate bull Emirates did make a profit – but nothing like it should have. with annual 2018-19 revenue of just short of US$30 billion and US$6 billion in cash on hand, with just US$136 million paid to its owners, the Investment Corporation of Dubai in dividends, it throws into sharp contrast how income and profits in airline world have little relative meaning.

The airline made just US$237 million in profits, 69% down on the 2017-18 figure. That’s just 0.795% of the total revenue. The total revenue figure was up 6% – a fair bit to be fair, but profits are almost non-existent in comparison.

To put it in even sharper perspective, for every single kilometre flown (63 billion of them), the airline made just US$0.0043 – yet that’s barely four one-thousandths of one US cent in profit. Flybe did better than that the last time it made a profit.

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The problem, low-cost carriers as always on shorter and mid-haul routes, but fuel costs as much as anything else. Emirates Cargo has also barely been scraping by and isn’t seeing the strong market it was, as Far Eastern and European carriers viciously compete. The use of longer range freighters (748F and 777F) by-passing Dubai and flying direct more cheaply and more quickly has had a sharp impact.

One of the airlines biggest mistakes seems to have been over-concentrating on two aircraft types, the 777 and A380, which just aren’t suited to the mid-haul routes under 6 hours, especially those to Pakistan, Iraq, India, smaller cities in Europe and Africa.

In many ways the end of the A380 orders was hastened by this realisation, and the decision to go for 40 A339’s and 30 A359’s moves the airline back to being better able to cope with those destinations as it did with the now departed A340/A330’s.

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