Emirates president Tim Clark has said he expects a ‘flat’ 2017 for the airline, as external factors impact on its business.
The Dubai carrier reported a 75 percent drop in net profit in the first half of the 2016-17 financial year, attributed to economic uncertainty and subdued travel demand.
The airline’s net profit was AED786 million ($214 million), down 75 percent from the same period in 2015, when Emirates reported one of its best half-year performances.
more recent results were reported in November last year, the airline attributed the drop in profit and revenues to the unfavourable currency environment and increased competition resulting in lower average fares.
In particular, it was impacted by currency devaluation and hard currency shortage in some African countries, as well as dampened travel demand due to ongoing economic uncertainty and security concerns across several markets in its network.
Speaking to Bloomberg, Clark admitted that 2016 was “not a good year” for the airline.
“I think ’17 could be even flatter, slightly worse,” he warned.
Writing in an opinion editorial for Arabian Business on the outlook for 2017, Clark said, “The road ahead, as always, is littered with challenges, but we always look for the silver lining.”
He said while the business fundamentals at Emirates were are “rock solid”, the airline was “not immune to sluggish economies, shifting consumer confidence and protectionist political landscapes”.
“These factors impact our ability to serve customers in markets where we are denied access, and also impact our customers’ demand for travel, and their travel patterns,” he wrote.
“Happily, the global appetite for travel remains resilient. In spite of all that has happened throughout 2016, be it terror attacks, laggard economic growth, or social unrest, people still want to travel. Consumers merely recalibrate their travel plans.”
He said 2017 will see a number of important developments in the UK and US, as well as in Europe where a number of key political milestones will take place in France, Germany and the Netherlands.
“We already see signs of a shift from the mainstream political status quo, which is accompanied by the danger of inward-looking policies that appeal to populist sentiment.
“Any potential shift away from liberalisation would be bad news for consumers, businesses and us. After all, Emirates is a product of multilaterism and liberalisation. Our business model from the beginning has been about connecting the world through the geo-centricity of Dubai, embracing competition, and tapping on global opportunities to offer consumers more travel options and better value for their money,” said Clark.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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.