Emirates: A 'glass half full' airline

Emirates Airlines symbolises the heady days of the past decade. From a massive A380 order to in-flight showers in first class, the airline made a name for itself outdoing its competitors. But with the world in the midst of a global recession, can the airline continue its lavish spree?

Based on Emirates' earnings for the six months to September 2008, it is clear that things are not as rosy as they once were. Citing fuel costs, the airline's net profit fell 88% to Dh284 million ($77 million) from a year earlier. Operating revenue grew 31% to Dh22.1 billion, but costs rose faster at 50.4% year-on-year. Revenue passenger traffic growth was 11%, which is below the capacity growth of 13%. For the previous fiscal year to March 2008, Emirates net profit rose 62% to Dh5 billion.

Despite the darkening economic landscape, Richard Vaughan, Emirates' senior vice-president of commercial operations for East Asia and Australasia, is buoyant about the airline's prospects. From its plan to expand 14% in 2009 with the addition of 18 new aircraft -- in contrast, Singapore Airlines will reduce capacity by 11% and cut 17 aircraft this year -- to turning down queries from the global airline alliances, Vaughan tells FinanceAsia that he is confident about Emirates strategy to go it alone, downturn or not.

How is Emirates performing in the current economic climate?
Obviously there's an effect but we're still pretty confident going forward. We are holding our own in most markets, some are patchy but there is no consistent trend downwards. The premium travel market is definitely softening.