Emirates says A340-600 order still on

Emirates has said its $4.2 billion order for 20 A340-600s still stands, despite speculation to the contrary from several sources.

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By  Mark Foxwell Published  May 15, 2006

Emirates has said its $4.2 billion order for 20 A340-600s still stands, despite speculation to the contrary from several sources. According to local newspaper reports, if Airbus’ planned redesign of the A340-600 does not meet the standards of the airline, Emirates may swap the order for more superjumbo A380s. However, Mike Simon, Emirates’ divisional senior vice president, told Aviation Business on April 22: “Emirates’ order for the Airbus A340-600s still stands. We are in close discussions with the manufacturer to ensure we have a suitable match for our fleet requirements.” According to several publications, Simon told reporters in Sharjah about the swap from the A340 to the A380s. An Emirates spokesman criticised the articles as not factually correct. “Mike Simon never made those comments and we have received apologies from those concerned,” said the spokesman. However earlier last month HH Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Emirates Group, said the order had been temporarily stalled to give Airbus time to make improvements but that swapping to more A380s was still an option. An inside source said that if Emirates were to back out of the order, the airplane manufacturer would have to sell the aircraft at rock bottom prices to other airlines. Emirates announced it was stalling the order earlier this month to allow Airbus to make improvements to the criticised A340, including fuel efficiency improvements. Speculation has mounted that the reason behind deferring the batch was to allow Emirates to pull out of the deal and sign up with Boeing. The Boeing 777 could be more suitable thanks to the aircraft being more fuel efficient and having two engines instead of four, like on the A340. Emirates currently has orders for 12 of the Airbus 340-600 aircraft and has an option for eight more. News of the potential swap follows Emirates’ announcement of record annual results and a $195 million deal with Fifa to become its official partner for 2007 to 2014. For the financial year ended March 31, 2006, Emirates Group posted net profits of US $762 million, up 5% from the previous year’s record profit of US $726 million. Group revenue increased by US $1.4 billion, or 27%, to reach US $6.6 billion, compared with US 5.2 billion) last year. The group’s cash balance stood at US $3 billion at the end of March, an improvement of 28.6% on a year earlier. For 2005-06, Emirates will pay an increased dividend of US $105 million to its owner, the government of Dubai, compared with $100 million last year. A new record total of 14.5 million passengers, two million more than last year, flew with Emirates in the latest financial year. “These results clearly show that Emirates’ customer-oriented approach and investments in providing a quality product — the best aircraft that money can buy, top-flight service and travel experience at a competitive price — has paid off in terms of retaining and winning new customers globally,” said Sheikh Ahmed. “It has been another tough year with pressure from fuel costs continuously dampening our robust net income production. Emirates has returned its 18th consecutive annual profit, and we are pleased to have achieved this solid performance while expanding our operations in an increasingly competitive environment.” Cost saving measures paid off as the group achieved a net profit margin of 11.8%. Fuel remained the biggest cost, accounting for 27.2% of total operating costs, up from 21.4% the previous year. The airline said that fuel hedging helped it save US $189 million.

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