US dollar 'eroding' Emirates profits, says airline chief

President Tim Clark also adds falling oil prices are 'double-edged sword' while regional conflicts threaten to disrupt operations
US dollar 'eroding' Emirates profits, says airline chief
(Getty Images)
By Sarah Townsend
Thu 14 Jan 2016 01:46 PM

The strong US dollar is “continuing to erode” Emirates Airline’s profits while regional conflicts threaten to “disrupt” operations, the group’s president has lamented.

Writing exclusively in Arabian Business, Sir Tim Clark gave his predictions for the year ahead.

He said 2015 was a year of considerable growth for the airline and it “would not be slowing down in 2016”.

However, the group continues to grapple with global currency fluctuations, the fall in oil price and political insecurity in the Middle East.

Clark said: “The strength of the US dollar against major global currencies continues to erode our profits, reflecting the sluggish global economic environment, air cargo traffic continues to flatline.”

The stronger US dollar has served to limit the competitiveness of Gulf products and services in the world markets.

In its half-year update in November, Emirates announced revenue was down 2.3 percent to AED 46.1 billion (US$ 12.6 billion) for the first six months of the 2015-16 financial year, from AED47.2 billion (US$ 12.9 billion) during the same period the previous year.

Emirates said at the time that revenues were “negatively impacted by the strong US dollar against major currencies”.

However, profit was up 65 percent to AED 3.7 billion (US$ 1.0 billion) - one of the group’s best half-year profit performances ever, with net profit rising to AED 3.7 billion (US$ 1.0 billion).

Writing in Arabian Business this month, Clark added that the plunge in fuel prices has been a “double-edged sword” – “on the one hand lowering operating costs, but on the other impacting global business confidence and market volatility.

“For many businesses, it is tempting to enjoy the benefits of cheaper fuel and take the foot off efficiency initiatives.

“At Emirates, we continue to invest in new fuel-efficient aircraft and technologies, because we know that is key to long-term sustainable growth.”

He added: “Regional conflicts continue to disrupt our operations.

“We are keeping a close watch on developments, pressing for greater accountability across the industry to share knowledge and intelligence – which underpins our relentless focus on safety.”

To read the full opinion piece written by Sir Tim Clark click here.

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