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...