[ad_1]
An Emirates Airbus 380-800 about to land.
Fabrizio Gandolfo | Images SOPA | LightRocket | fake images
Emirates expects to return to profitability in the next two years, as new travel corridors open and the global aviation industry tries to recover from the worst crisis in its history.
“I believe that within the next 18 months, two years, we will be profitable again,” Emirates Chairman Tim Clark told CNBC in an exclusive interview on Sunday.
“We will certainly be cash positive over the course of next year’s back-end, returning to profitability in (financial year) 2022-2023,” he added.
Earlier this week, the Emirates Group reported a loss of $ 3.8 billion during the first half of the year, its first loss in 30 years, as lockdowns related to the coronavirus halted air passenger travel globally. Revenue collapsed 74 percent to $ 3.7 billion.
“There are a lot of things that can change that,” Clark said, pointing to a number of key concerns that still hang over the sector. “We are an international company that operates in all operations in the world.”
His comments come after new warnings from IATA that the industry cannot cut costs enough to neutralize the burning of cash and avoid bankruptcies in 2021.
“Cash is king,” Clark said. “As long as we can keep our cash position in good shape, we believe we will be ready to re-enter the markets, as well and as large as ever.”
Emirates said it was leveraging its cash reserves to ensure it had access to sufficient funds to maintain operations. It has cut nearly 25 percent of its staff, and the Dubai government stepped in to inject $ 2 billion through an equity investment in an effort to support its recovery.
“We think things will get back together pretty quickly. I’m not one of those people who thinks it’s going to take a long time or that it won’t be the way it was,” Clark added.
“I tend to believe that we will be as good as we were in the pre-Covid days as an airline.”
UK-UAE travel corridor
The United Kingdom this week added the United Arab Emirates to its list of travel corridors, meaning that travelers flying from the United Arab Emirates to the United Kingdom after November 14 will no longer need to isolate themselves for 14 days. .
“The government has been working for five months to try to persuade the UK government that we should be on their list,” Clark said, hailing the decision as “a huge boost to tourism in terms of travel between the two countries.”
The UK is among the most important markets in the Emirates network for demand and profitability of passenger travel, with the route from Dubai to London Heathrow accounting for the largest share of departing seats in 2019.
“We are already experiencing a huge increase in booking speed in our systems in regards to people coming to Dubai from the UK after 2 December after the shutdown ends,” Clark said.
“I remain optimistic that other corridors will open as we have this under control,” he added. “It’s just taking a little longer than everyone thought and it’s not without its difficulties.”
Clark said trips to 104 cities have now been restored, and 151 of its Boeing 777 jets were operating and carrying passengers through the network in various capacities. Emirates still has around 150 A380 aircraft on the ground.
Improved macro conditions
Clark was more optimistic about the regional and global economic outlook, but said recovery will not come immediately. “I think the global economy is going to take time to get out of this particular state,” he said.
He also expects oil prices to remain low, with oversupply and weak demand helping to lower the cost for major airlines like Emirates.
“As long as it is spotty and the supply of oil remains robust, the price is likely to be at the $ 40 to $ 50 price level over the course of 2021,” he said. “That gives us an interaction price and allows us to operate profitably both in a profit-and-loss situation and from a cash standpoint.”
