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Emirates expects to regain profitability over the next two years as new routes open and the global airline industry struggles to recover from the worst crisis in its history.
“I think in the next 18 months, or two years, we will return to profitability,” Tim Clark, director of Emirates Airlines, told CNBC on Sunday in an interview.
“We will achieve positive net cash flow by the end of next year and return to profitability in (fiscal) 2022-2023,” he added, in an interview with Al Arabiya.net.
Earlier this week, Emirates Airlines reported a first-half loss of $ 3.8 billion, its first loss in 30 years, as closures linked to the “Corona” virus resulted in the suspension of international travel, while revenues from the company was collapsing from a rate. 74% to $ 3.7 billion.
“There are a lot of things that can change that,” Clark said, highlighting a number of key concerns that still weigh on the travel industry. “We are an international company with operations in all countries of the world.”
His comments follow new warnings from the International Air Transport Association (IATA) that the industry cannot cut costs enough to neutralize large cash bleeds and avoid bankruptcy in 2021.
The cache is king
“Cash is king,” said Clark, adding that “as long as we can keep our cash position in good shape, we believe we will be ready to return to the markets, as we always have.”
Emirates Airlines said it was using its cash reserves to ensure it received sufficient funding to maintain operations, with the company slashing its employees by 25% and the Dubai government stepped in with an injection of $ 2 billion in capital to try to revive the business.
Clark expressed great optimism, saying, “Everything will be restored quickly, and I don’t think it will take long or that it won’t return to what it was.”
“I tend to believe that we will be as good as before Covid as an airline,” he added.
Fly Emirates
This week, the UK included the UAE on its list of travel destinations, meaning travelers from the UAE to the UK after November 14 will no longer need to self-isolate for 14 days.
Clark said: “The government has been working for five months to try to convince the British government of the need to put the United Arab Emirates on its list”, welcoming the decision and describing it as “a major boost for tourism between the two countries “.
The UK is among the most important markets in the Emirates network for both passenger travel demand and profitability, with Dubai-London Heathrow accounting for the highest share of departing seats in 2019.
Opening of new destinations
“We are already seeing a significant increase in booking speed in our systems for those arriving in Dubai from the UK after December 2 and the lockdown is over,” Clark said.
“I remain optimistic about the opening of the doors to other destinations,” he added.
Clark said travel has been restored to 104 cities, as 151 of its Boeing 777s have been operated to carry passengers through those destinations, while Emirates still have around 150 A380s on the ground.
In terms of macroeconomics, Clark is more optimistic, except that he sees a recovery that does not come immediately. “I think the global economy will take time to get out of these situations,” he said.
Oil prices are also expected to remain low, with increased supply and weaker demand helping to lower costs for major airlines such as Emirates Airlines.
He expected strong oil supplies to push the price up to levels between $ 40 and $ 50 a barrel in 2021, which would allow the company to obtain more competitive prices that would appear on the profit list. and losses and cash flow.
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