Arabian Business Weekly Update March 27, 2005

Emirates Airline is set to break its own profits records. But prices are still high. THERE can be few greater successes in business than that of Emirates Airline. Record profits, record revenues and record growth have rightly made Emirates the envy of the industry around the world. But success comes at a price; in Emirates Airline's case, that price has been passed onto its customers.

  • E-Mail
By  Anil Bhoyrul Published  March 27, 2005

Emirates must share its success|~||~||~|Emirates Airline is set to break its own profits records. But prices are still high. THERE can be few greater successes in business than that of Emirates Airline. Record profits, record revenues and record growth have rightly made Emirates the envy of the industry around the world. But success comes at a price; in Emirates Airline's case, that price has been passed onto its customers. First, take a look at the figures that the company has delivered. For the year to March 2004, profits came in at US$476 million, a staggering rise of 74% on the previous year. In the six months following that, they hit US$236 million, a 40% jump on the previous year. The company has grown at an average rate of 15% every year since it was founded in 1985. Today, it serves 77 cities in 54 countries, and in a matter of weeks is set to announce it has broken its own profits records. Another 100 aircraft will also be added to its existing fleet of 73 by 2012. Impressive stuff, and chairman Sheikh Ahmed deserves every praise for his business acumen. Whether Emirates' customers would wish to lead that praise is another matter. In June last year, it raised the fuel surcharge levied on passengers by nearly US$20 for flights out of Dubai. Similar charges have been put on Emirates flights coming out of other airports. The airline says it has no choice but to pass on the costs of rising oil prices to passengers. This is not acceptable from a company that made millions of dollars on exchange rates last year, purely because of the strengthening of the euro and British pound. It is also not acceptable from a company that benefits from US$522 million of tax savings compared with competitors like Air France. Emirates should be proud of the success it has achieved — and it must share that success by dropping its fuel surcharges. ||**||Yemen’s double standards|~||~||~|Once again Arab leaders are meeting in Algeria to discuss reform and modernisation. The sentiments of Morocco's King Mohammad, that change should come at a pace of their own choosing, will be echoed by his fellow leaders. Since 1969, no ruler in any of the 21 Arab League states has lost power through elections. No-one is likely to in the foreseeable future, while economic reforms are as, if not more, crucial. That said, the presence at this “reform" gathering of Yemen's vice president Abd Raboh Mansour Hadi wreaks of hypocrisy. The day before he boarded the plane, Hadi was party to the Yemeni court order, which sent the editor-in-chief of the country's Shura newspaper to jail for a year. Abdul Kareem Al Khawiani's crime was to call on Yemen's rulers to reform. Once again in the Arab world, actions speak louder than words. ||**||The show must not go on|~||~||~|Should Mohammed Alabbar still be looking for a career in television, I suggest he applies to The Apprentice. As we report this week, Alabbar has pulled himself out of the show, which he was due to host. The programme, to run over 15 weeks, was intended to showcase business skills. It is already a farce: Its owners Freemantle Media are involved in a legal dispute with rivals MediaGroup, claiming MediaGroup's own show CEO is a copy of its idea. Filming has been delayed. The host has embarrassingly pulled out, just weeks after stirring up unprecedented controversy by visiting Palestine. Alabbar, also chairman of Emaar, has in recent weeks shown exactly how not to conduct yourself in business. If The Apprentice ever runs, Alabbar would make an ideal contestant. After all, he needs to learn a thing or two. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code