The Sheikh of success

It’s been a tough year for the aviation industry and Emirates Airline is suffering along with the rest. While global passenger traffic is now starting to show some signs of recovery — airline traffic in August declined the least amount this year — the economic downturn has left many airlines heading into free fall.

In May, the Emirates Group, which includes the airport operations company, Dnata as well as several other businesses, reported a 72 percent decline in profits to $406m.

The airline itself, however, still managed to book a $268m profit for the year to March 31, 2009. Compare this to the airline industry as a whole, which is predicted to lose around $11bn this year, and the figures look impressive.

But that’s not to say that Emirates doesn’t face its own challenges. In the November issue of CEO Middle East, the group’s chairman, HH Sheikh Ahmed bin Saeed Al Maktoum, reiterates once again that the airline doesn’t receive government subsidies, but ask any analyst and they will tell you that oil prices are only set to rise.

The cost of fuel is just one of the two shadows looming on Emirates’ horizon, the second of which being the 58 A380s — with a combined list price of $18bn — that it has agreed to take possession of in the coming years. Those orders were placed when the industry was soaring; today the mood is very different.

Much of Emirates’ future success will depend on Sheikh Ahmed, the man who has delivered 21 years of consecutive growth. His mantra today is “don’t panic” but it is only through his continued ability to drive growth that the airline will stay on top. He’ll need to keep up his past form in order to make sure that Emirates stays on course.

Claire Ferris-Lay is the deputy editor of CEO Middle East.

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM