Annual Report 2008-2009 - Emirates.com

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4 The Emirates Group Chairman and Chief Executive, Emirates Airline and Group At the San Francisco inaugural, Sheikh Ahmed with Mayor Gavin Newsom His Highness Sheikh Ahmed bin Saeed Al-Maktoum No one could have predicted the global recession which is now impacting every country on earth. As I have often indicated, airlines are particularly susceptible to the socio-economic conditions prevailing in the world – and this is no ordinary situation. I agree with my colleague, Giovanni Bisignani, the Director General and CEO of the International Air Transport Association (IATA) who said, “The state of the airline industry today is grim and we predict a worldwide loss of US$4.7 billion (AED 17.3 billion), adding to an industry debt of US$170 billion (AED 624 billion) reflecting the rapid deterioration of global economic conditions.”
In fact, as we move into the new financial year, the outlook is not improving. Although fuel prices are dropping, demand is slowing down and revenues plummeting. For Emirates, the past year saw the first six months posting record fuel prices with oil rising to US$147 (AED 540) a barrel and then the decrease in demand was followed by declining yields with the strengthening US dollar against major currencies, causing significant losses. The GBP dropped 28 per cent in value, AUD went down 25 per cent and the EUR fell 16 per cent. Despite the global meltdown and the doom and gloom associated with this real crisis, and without trying to minimise the devastating effect it is having on so many countries, businesses and families, I still believe that 2009/10 will be a year of satisfactory growth for the Emirates Group. In the financial year 2008/09, the group met these awesome challenges with determination, improved efficiency and fresh, market-leading initiatives. We returned a net profit of AED 1.49 billion (US$406 million), a 72 per cent decrease on the previous year’s all-time record profit, but under the circumstances a satisfactory result. Emirates net profit was AED 982 million (US$268 million) and Dnata earned AED 507 million (US$138 million). It has been forecast that in the Middle East in 2009/10 there will be a slight increase in passenger growth of 1.2 per cent, though this will be accompanied by an overall increase in capacity of 3.8 per cent. We expect continuing fierce competition as we defend our market share in all regions, often facing “suicidal” air fares from some of the competing airlines. This is a situation which puts pressure on all carriers but we will continue to maintain our high service standards as the fares hit levels which are unprofitable. Already, we have tried to respond by introducing new features such as Business Rewards to help small to medium enterprises benefit from Skywards Miles. We have not reduced the quality of our award-winning service. Unlike other travelrelated organisations, we have not reduced staff numbers. In fact, as usual we have not responded with knee-jerk reactions as we face an unsettled future. We know we must remain flexible. We have to make changes to adapt to the new world travel order and address our costs without affecting the travel convenience and enjoyment of our customers. We will maintain our commitment to the protection of the environment. We will meet the high expectations of our passenger and cargo clients. We will ensure the job security of our staff. In the financial year, there were two major events which involved Emirates and Dnata – the delivery of Emirates’ first A380 superjumbo and the opening of the new Emirates Terminal 3 at Dubai International airport. Emirates earned worldwide headlines in both cases but we recognised Dnata’s important role behind the scenes, in opening the state-of-the-art baggage handling system. One of the highlights of my year was attending the A380 Reveal Ceremony in Hamburg. 5
Page 1: Annual Report 2008-2009 The Emirate
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Page 46 and 47: external agencies such as Dubai Imm
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Page 54 and 55: Contents Financial Report 2008-2009
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Consolidated financial statements T
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Profitability Group net profit for
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Value added Value added is a measur
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Fuel and oil 14,443 Employee (see (
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Capacity, traffic, load factor and
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At 31 Mach 2009: Fleet information
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Expenditure 067 2008-09 2007-08 AED
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Employee strength and productivity
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Independent auditor’s report to t
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Consolidated balance sheet as at 31
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Consolidated cash flow statement fo
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2. Summary of significant accountin
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3. Critical accounting estimates an
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4. Revenue (continued) Transport re
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10. Property, plant and equipment C
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11. Intangible assets Cost 1 April
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Movement of investments in associat
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14. Other investments (continued) (
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18. Capital Capital represents the
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22. Term loans Balance brought forw
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24. Provisions (continued) (i) Fund
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27. Trade and other payables Trade
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32. Derivative financial instrument
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34. Related party transactions The
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35. Financial risk management Finan
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35. Financial risk management (cont
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36. Capital risk management Emirate
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Consolidated income statement for t
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1 April 2007 62,615 Currency transl
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1. Establishment and operations Not
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8. Property, plant and equipment Co
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10. Investments in subsidiaries, as
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12. Trade and other receivables Tra
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14. Employee end of service benefit
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17. Trade and other payables Less t
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23. Related party transactions The
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24. Financial risk management Dnata
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24. Financial risk management (cont
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