Trouble for Emirates- Profit Collapse

poteen

http://www.aljazeera.com/news/2017/05/emirates-airline-profits-825-percent-year-170511152138875.html

Not good news for the Dubai based Airline.

Open Up

poteen wrote: »

http://www.aljazeera.com/news/2017/05/emirates-airline-profits-825-percent-year-170511152138875.html

Not good news for the Dubai based Airline.

Yes we have seen, and will continue to see, most airlines reporting reduced profits this year...

Cloudio9

Open Up wrote: »

Yes we have seen, and will continue to see, most airlines reporting reduced profits this year...

Hmmmm IAG record profits? Ryanair?

On what basis will most report reduced profit?

Open Up

Cloudio9 wrote: »

Hmmmm IAG record profits? Ryanair?

On what basis will most report reduced profit?

"IAG (UK) reports 1Q 2017 profit after tax down 74% to US$29.4 million, with total operating revenues down 2.8% to $5.3 billion. Cash at quarter end was $8.1 billion."

As for Ryanair, well they're basically always an exception. I didn't say all airlines... However their profit increases are slowing.

drunkmonkey

Warren Buffet is buying lots of Airline Stock he probably made a killing with the jump in United the other day.
https://www.google.ie/amp/investorplace.com/2017/05/why-did-buffett-change-his-mind-on-airline-stocks/amp/

smurfjed

Actually they still made a profit albeit a smaller one, for me the major impact of this is the employee payout, what profit share shall they offer this year.
Dubai isn't a cheap place to live in.

Open Up

smurfjed wrote: »

Actually they still made a profit albeit a smaller one, for me the major impact of this is the employee payout, what profit share shall they offer this year.
Dubai isn't a cheap place to live in.

No one said they didn't make a profit. Do Emirates usually issue profit shares?

smurfjed

Yep, based on the actual profit or some convoluted formula they give staff an annual profit share.... sounds wonderful but from EK staff that i have known this was a needed source of income, rather than an additional source.

Cloudio9

Open Up wrote: »

"IAG (UK) reports 1Q 2017 profit after tax down 74% to US$29.4 million, with total operating revenues down 2.8% to $5.3 billion. Cash at quarter end was $8.1 billion."

As for Ryanair, well they're basically always an exception. I didn't say all airlines... However their profit increases are slowing.

BA parent enjoys record first quarter as demand picks up

IAG beats expectations and signs point to turnround in European airline industry

https://www.ft.com/content/d761191e-316b-11e7-9555-

Open Up

smurfjed wrote: »

Yep, based on the actual profit or some convoluted formula they give staff an annual profit share.... sounds wonderful but from EK staff that i have known this was a needed source of income, rather than an additional source.

Trying times for those folks so. Bit unfair if it just supplements their basic wage to reach living standard.

smurfjed

Dubai isn't a cheap city to live in, even if you ignore the glamorous side.

Open Up

Cloudio9 wrote: »

BA parent enjoys record first quarter as demand picks up

IAG beats expectations and signs point to turnround in European airline industry

https://www.ft.com/content/d761191e-316b-11e7-9555-

It's a bit of spin. Profit before exceptional items was up. However, net profit, as reported in my post: down 74%.

Growler!!!

smurfjed wrote: »

Actually they still made a profit albeit a smaller one, for me the major impact of this is the employee payout, what profit share shall they offer this year.
Dubai isn't a cheap place to live in.

No profit share this year. I'll have to let one of my maids go!

Doltanian

Could this also represent the death knell for the A380 considering Emirates are the biggest driver of new orders, the Aviation and entire global economy is going badly at the moment and the A380 could well be in trouble if the likes of Emirates start to tighten their belts.

jimmycrackcorm

Open Up wrote:

It's a bit of spin. Profit before exceptional items was up. However, net profit, as reported in my post: down 74%.

What were the exceptional items?

Open Up

jimmycrackcorm wrote: »

What were the exceptional items?

Either EBIT or EBITDA. Mainly tax.

Cloudio9

Open Up wrote: »

It's a bit of spin. Profit before exceptional items was up. However, net profit, as reported in my post: down 74%.

A bit of spin in the financial times? Righhhhht

Noxegon

Doltanian wrote: »

Could this also represent the death knell for the A380 considering Emirates are the biggest driver of new orders, the Aviation and entire global economy is going badly at the moment and the A380 could well be in trouble if the likes of Emirates start to tighten their belts.

For what it's worth I was on an 380 last night that I'd guess was about 30% loaded. I got several hours of passable sleep by sprawling across a row of four.

I love the aircraft but I think it's too big for a lot of the routes it operates.

Open Up

Cloudio9 wrote: »

A bit of spin in the financial times? Righhhhht

The spin comes from the press releases from the airlines. You can see the figures I quoted at the bottom of the FT article. Why are you so sceptical?

Blut2

Its a bit of a perfect storm with the multiple events hitting at once: US laptop ban, local Middle Eastern economies crashing due to the oil price, and the strong US dollar/currency pegged AED increasing their operating costs. It's impressive they managed to stay in the black at all given that, especially for a 29th consecutive year.

They've achieved that by trimming any fat they can it seems. Approx 1000 layoffs were announced for the HQ a couple months ago, and they've implemented a whole host of cost cutting measures both at HQ and on flights.

I think if the AED isn't devalued they'll struggle moving forwards though. None of those negative externalities are likely to change in the near future, and the fat has already been trimmed. And they've got so much additional capacity coming on-stream every few months that just compounds the problem.

Doltanian

Blut2 wrote: »

Its a bit of a perfect storm with the multiple events hitting at once: US laptop ban, local Middle Eastern economies crashing due to the oil price, and the strong US dollar/currency pegged AED increasing their operating costs. It's impressive they managed to stay in the black at all given that, especially for a 29th consecutive year.

They've achieved that by trimming any fat they can it seems. Approx 1000 layoffs were announced for the HQ a couple months ago, and they've implemented a whole host of cost cutting measures both at HQ and on flights.

I think if the AED isn't devalued they'll struggle moving forwards though. None of those negative externalities are likely to change in the near future, and the fat has already been trimmed. And they've got so much additional capacity coming on-stream every few months that just compounds the problem.

I wonder in Emirates case which would be better low or high oil prices? Low oil prices equals lower refuelling costs for their fleet and gives most consumers around the world greater spending power which they can spend on holidays and flights. Higher oil prices are bad for everyone else except the Mid-East oil producing nations.

J.pilkington

Doltanian wrote: »

I wonder in Emirates case which would be better low or high oil prices? Low oil prices equals lower refuelling costs for their fleet and gives most consumers around the world greater spending power which they can spend on holidays and flights. Higher oil prices are bad for everyone else except the Mid-East oil producing nations.

The emirate of Dubai(own Emirates airlines) actually have very little oil, its their fellow emirate (there are 7 in the UAE) Abu Dhabi (own etihad) that have the vast majority of the oil in the country.

It was Abu Dhabi who bailed out Dubai in the recession

Captain_Crash

J.pilkington wrote: »

It was Abu Dhabi who bailed out Dubai in the recession

This is why the Burj Dubai was renamed the Burj Khalifa. It was Khalifa Bin Zayed, the Emir of Abu Dhabi who bailed out the Dubai government.

ED E

Doltanian wrote: »

Could this also represent the death knell for the A380

Has that already been hailed by the long and skinnies that are getting the ETOPs ratings to replace em. RIP Hub+Spoke model.

Noxegon

I don't think I'd use a direct Dublin to Singapore. I actually like getting off the plane and stretching at the half way point.

Growler!!!

Captain_Crash wrote: »

J.pilkington wrote: »

It was Abu Dhabi who bailed out Dubai in the recession

This is why the Burj Al Arab was renamed the Burj Khalifa. It was Khalifa Bin Zayed, the Emir of Abu Dhabi who bailed out the Dubai government.

The Burj Dubai was renamed Burj Khalifa. The Burj Al Arab is further south along the coast.

There were 17 A380's parked up the last time I was there. They need to convert the remaining 380 orders into A350 orders for any hope to survive. It gets Airbus and EK out of trouble. Or get 787's as the Boeing guys already have the rating!

Captain_Crash

Growler!!! wrote: »

The Burj Dubai was renamed Burj Khalifa. The Burj Al Arab is further south along the coast.

Yes, got my buildings mixed up. Corrected now. Thanks!

737max

Noxegon wrote: »

I don't think I'd use a direct Dublin to Singapore. I actually like getting off the plane and stretching at the half way point.

The halfway point between Dublin and Singapore is not anywhere near Arabia

http://www.gcmap.com/mapui?P=SIN-DUB%0D%0A&MS=wls&DU=km

stopping off somewhere in the Emirates is like travelling from Dublin to Galway via Templemore.

Open Up

737max wrote: »

The halfway point between Dublin and Singapore is not anywhere near Arabia

http://www.gcmap.com/mapui?P=SIN-DUB%0D%0A&MS=wls&DU=km

stopping off somewhere in the Emirates is like travelling from Dublin to Galway via Templemore.

If he wants to connect to Singapore, it won't be in Kazakhstan...

737max

who needs to connect anymore? The planes have more endurance than that.
If he has to connect and Dub can't sheperd enough punters for Singapore on one plane then it can be somewhere like Frankfurt or Heathrow.

Open Up

737max wrote: »

who needs to connect anymore? The planes have more endurance than that.
If he has to connect and Dub can't sheperd enough punters for Singapore on one plane then it can be somewhere like Frankfurt or Heathrow.

His point is he doesn't want to spend that long on an airplane. Unless I'm mistaken...

737max

Open Up wrote: »

His point is he doesn't want to spend that long on an airplane. Unless I'm mistaken...

That is an awful expensive plane to be delaying for a couple of hours between source and destination and an awful lot of fuel burnt descending and ascending back to cruise height just because a passenger doesn't like to spend that long on a plane.

Open Up

737max wrote: »

That is an awful expensive plane to be delaying for a couple of hours between source and destination and an awful lot of fuel burnt descending and ascending back to cruise height just because a passenger doesn't like to spend that long on a plane.

Haha I don't know if you're taking the piss now or not?! A connecting flight we're talking about here? If you fly Emirates DUB-SYD you connect in Dubai, and change planes?

737max

Open Up wrote: »

Haha I don't know if you're taking the piss nor or not?! A connecting flight we're talking about here? If you fly Emirates DUB-SYD you connect in Dubai, and change planes?

Dubai is precisely convenient to nowhere. Do a great circle map calculation for anywhere developed in the world with large populations; all the routes swing up around the 'stans before hitting Europe.

Noxegon

737max wrote: »

The halfway point between Dublin and Singapore is not anywhere near Arabia

When you add up the flight times it's close enough. The shortest connection I can do is via Heathrow, which works out at:

DUB-LHR = ~1hr
LHR-SIN = ~12.5hrs

Compared against:

DUB-DXB = ~7hrs
DXB-SIN = ~7hrs

Reverse trips slightly longer in both cases.

Open Up

737max wrote: »

Dubai is precisely convenient to nowhere. Do a great circle map calculation for anywhere developed in the world with large populations; all the routes swing up around the 'stans before hitting Europe.

Ok... If Noxegen wants to fly to Singapore and does not want to spend 10 hours or whatever on a plane. What options does be have?

737max

Noxegon wrote: »

When you add up the flight times it's close enough. The shortest connection I can do is via Heathrow, which works out at:

DUB-LHR = ~1hr
LHR-SIN = ~12.5hrs

Compared against:

DUB-DXB = ~7hrs
DXB-SIN = ~7hrs

Reverse trips slightly longer in both cases.

You value your time less than the airlines(excepting the ME3) value the opportunity cost of their aircraft. these are aircraft with list prices running in to 9 digits.

737max

Open Up wrote: »

Ok... If Noxegen wants to fly to Singapore and does not want to spend 10 hours or whatever on a plane. What options does be have?

The choice will be made soon enough by the Airlines in the way the airlines dictate how what he has for his inflight meal and how much carry-on luggage he can drag around.

Open Up

737max wrote: »

The choice will be made soon enough by the Airlines in the way the airlines dictate how what he has for his inflight meal and how much carry-on luggage he can drag around.

This is going way off on a tangent. The point is someone can choose to fly to whatever destination they want, how they want. I can fly to Singapore via Alaska if I want with 20 stops on the way. Are you just looking at this from the airline's perspective or something? I really don't understand. As a passenger, if I don't like long flights, I don't have to take a long flight. I can, however, take several short flights that have the same result. Yes it takes longer overall. But sacrifices have to be made to satisfy my needs. That is all.

pepe the prawn

Growler!!! wrote: »

The Burj Dubai was renamed Burj Khalifa. The Burj Al Arab is further south along the coast.

There were 17 A380's parked up the last time I was there. They need to convert the remaining 380 orders into A350 orders for any hope to survive. It gets Airbus and EK out of trouble. Or get 787's as the Boeing guys already have the rating!

Is the 777/787 a common type rating?

Open Up

pepe the prawn wrote: »

Is the 777/787 a common type rating?

Think he means the 787 already has the ETOPS rating.

Tenger

If we going to debate the EK business model of creating a worldwide connection hub from scratch then lets all try to do so politely, using facts rather than emotions. Remember that anothers personal choice is just that, it doesnt mean that it is wrong just because you dont prefer it

Captain_Crash

pepe the prawn wrote: »

Is the 777/787 a common type rating?

Yes, or atleast that was the plan... a friend of the family left FR for the 777 with BA several years ago so he could fly the 787 once they received them. He told me it was a common rating hence the move to the 777.

However I follow several BA pilots on twitter and am yet to see anyone flying both. So being rated and actually doing it in practice are not quite the same. (i.e. EI don't cross fleet between the A320 and A330, but LX do ect)

Open Up

Captain_Crash wrote: »

Yes, or atleast that was the plan... a friend of the family left FR for the 777 with BA several years ago so he could fly the 787 once they received them. He told me it was a common rating hence the move to the 777.

However I follow several BA pilots on twitter and am yet to see anyone flying both. So being rated and actually doing it in practice are not quite the same. (i.e. EI don't cross fleet between the A320 and A330, but LX do ect)

That's interesting. Never knew that. Would appear there is still some conversion and familiarisation training involved though, which would make sense given the cockpits are quite different.

Growler!!!

pepe the prawn wrote: »

Is the 777/787 a common type rating?

Yes, same rating. Had a look around the BA 787 sim in Heathrow with the Boeing instructor. Very similar, I'm sure there would be a short conversion course though. But seeing as the 77F is a different beast altogether (mix of body and wings from two versions and handles completely differently) than the pax version and it's only an online CBT conversion here!

It would make sense for EK to be looking at the 787 or 350 for the lower load factor routes. Or maybe absorb Flydubai under the EK umbrella as has been rumoured (crewmoured!!).

Noxegon

I'm not bothered about the opportunity cost of a 777. I'm a customer, not an airline representative. As for valuing my time, I do wonder just how much use the three/four hours saved by going non stop are likely to be. I'm generally in jet lagged stupor by the time I get to Singapore regardless

I don't like flying over eight hours in a stretch when I don't have to as I get extremely cramped in the cheap seats. For me the ability to stretch and move around tends to outweigh the advantage of travelling nonstop.

J.pilkington

Noxegon wrote: »

I'm not bothered about the opportunity cost of a 777. I'm a customer, not an airline representative. As for valuing my time, I do wonder just how much use the three/four hours saved by going non stop are likely to be. I'm generally in jet lagged stupor by the time I get to Singapore regardless

I don't like flying over eight hours in a stretch when I don't have to as I get extremely cramped in the cheap seats. For me the ability to stretch and move around tends to outweigh the advantage of travelling nonstop.

I am not a fan of flying emirates / etihad to east Asia unless you are stopping off in Abu Dhabi / Dubai as its a case of the hassle of boarding a large plane, take a long flight, disembark large plane, sit around with thousands of other grumpy zombies in a packed terminal who are all tired then the hassle of boarding another large plane for another long flight. I prefer the short hop on a small plane then 1 single long flight.

1123heavy

Cost is what it ultimately comes down to for the vast majority of passengers. I personally know a few people who often travel to Australia, they have been commenting recently on how expensive the tickets have become with Emirates and so are seeking alternative means of travel.

With all the cost saving measures they've introduced (baggage allowances, upgrade rules etc), increasing of ticket fares, constant eroding of terms and conditions of their employees, pilots and cabin crew working to their max hours (I suspected this was pprune nonsense until I spoke to an emirates pilot myself) so delievering maximum productivity on the minimal staff numbers, decreasing fuel prices etc ... one has to wonder where it is all going wrong for them with all those things in their favour.

One person put it as a "LCC airline charging luxury airline services". That's probably a bit extreme, but the mighty do seem to have fallen.

Blut2

HEL/Finnair is a great option for connections to Northern Asia. Its a great little airport.

1123heavy wrote: »

One person put it as a "LCC airline charging luxury airline services". That's probably a bit extreme, but the mighty do seem to have fallen.

To be fair I'd still rather travel Emirates long-haul than any US carrier. And than most European carriers. Standards are slipping, but they're still significantly higher than a lot of legacy carriers.

They're going to have to change that order of A380s anyway I think, thats the first big move they can make moving forward that will help.

1123heavy

Blut2 wrote: »

They're going to have to change that order of A380s anyway I think, thats the first big move they can make moving forward that will help.

That is correct, however in that part of the world, admitting to making a mistake and getting something wrong is not commonplace. Hubris is the best way to describe it!

Noxegon

1123heavy wrote: »

Cost is what it ultimately comes down to for the vast majority of passengers. I personally know a few people who often travel to Australia, they have been commenting recently on how expensive the tickets have become with Emirates and so are seeking alternative means of travel.

The only airline I've found cheaper for my Singapore runs is Turkish.

I just checked dates for my next trip – the cheapest non-middle-east airline (Lufthansa) is very nearly double what I'm paying.