Sheikh Ahmed bin Saeed al Maktoum rules out move despite fuel costs now accounting for 28% of the airline's expenses
Emirates has no plans to return to fuel hedging despite oil prices tracking upwards, chairman Sheikh Ahmed bin Saeed al Maktoum has said
Answering an Arabian Business question during a post earnings press conference, Sheikh Ahmed said: “The team we have knows how the company is run and if they suggest it then we will. But right now there are no plans. We will not hedge.”
Emirates abandoned its oil price hedge in 2009. In the period until 2014 oil rallied to historic highs which Sheikh Ahmed mentioned when speaking about not pursuing a hedge.
In April 2015, the airline’s president Tim Clark also dismissed a return to fuel hedging, which allows companies to reduce their exposure to volatile and potentially rising fuel costs.
The Emirates Group announced on Wednesday profits of $1.1 billion powered by a 124 percent surge in airline profits.
However fuel costs now account for 28 percent of the airline's expenses up from 25 percent a year ago, its largest cost component. Oil prices have risen by nearly 50 percent during the same period.
“Fuel prices reached $140 in the past, but did it stop people from traveling? No it didn’t. I know there is an increase in the fuel price, but we will see what happens. As an airline we cannot control what happens in geopolitics or in the oil markets,” he said.
He added that Emirates has yet to realise the full benefit of its partnership with Flydubai, which was announced last year.
The first codeshare flights began at the end of October and between November 2017 and this March, over 400,000 passengers have taken advantage of the partnership and more than 250,000 passengers have already planned their trip for the year ahead.
The partnership initially began with codeshare flights to 29 cities, and this has since expanded to meet growing demand.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.