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Ready for Take Off: An aviation round-up

Ready for Take Off: An aviation round-up

The skies is the limit as Etihad announces a 28 % increase in revenue in Q1, Dubai Duty Free says sales are up 14% and the IATA says Middle East aviation has "now fully recovered" from the recession.

April 4, 2012 2:55 by

And now, Kipp presents our weekly, erm… monthly, erm… random aviation report. It is been a good week for aviation, and the week isn’t even up yet. From Etihad’s spectacular first quarter results, Emirates new branding and Dubai Duty Free sales going through the roof—you can understand why the International Air Transport Association (IATA) after revealing revealed global airline figures for February claimed Middle East aviation had “now fully recovered” from the downturn.

To start off with, let’s talk about Etihad Airways. Yesterday the carrier announced a 28 percent increase in revenue—to the tune of Dh3.63 billion over the same period in 2011. Etihad, who broke even last year, also enjoyed an increase of passengers this quarter—from 500,000 to 2.4 million. “Despite the tough economic times we believe our business model of organic network growth combined with codeshare partnerships and strategic equity investments will enable us to continue to prosper and ensure sustainable profitability” said Etihad Airways president and CEO James Hogan. It is too early in the game to gauge the impact of Etihad’s investments in airberlin and Air Seychelles—but so far it is looking good.

And on to Etihad’s older brother, Emirates Airlines—the carrier has been in the news for its latest marketing campaign which see a departure from the old and much loved slogan of ‘Keep Discovering’ to “Hello, Tomorrow.” Doesn’t quite have a ring to it, does it? Kipp’s probably just being a sentimental old fool, then. Emirates Airlines says: the change aims to “inspir(e) people to greet tomorrow’s unlimited potential, now.” Created by Emirates communication partner Strawberry Frog, the campaign has been the center of much attention.  Executive Vice Chairman of Emirates Airline Maurice Flanagan said: “Our new corporate image and global marketing campaign both underline the confidence we have in our existing products and services, and the vision we have for the future growth of the airline.”

Here in Dubai, sales were up 14 percent this quarter at Dubai Duty Free to a cool Dh1.42 billion. The increase has been credited to a rise in spending on alcohol, perfume and gold. Dubai Duty Free saw an 22 percent increase in perfume sales this quarter of Dh213 million and a 19 percent increase in electronics to Dh107 million.

And though things are going rather well for Gulf carriers, this isn’t the case over at Royal Jordanian Airlines—who’s CEO  called a merger with a larger carrier “inevitable” and “a must”. Royal Jordanian CEO Hussein Dabbas said : “We are looking and reviewing options and talking to airlines to see when the time is right for us to do something,” Dabbas said yesterday. “With the pressure we are seeing from mega-carriers around the world, whether European or regional, to continue as we are is going to be a difficult game to follow.”

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1 Comment

  1. Robert on April 4, 2012 4:01 pm

    Random comments on your random aviation commentary:

    1. Etihad – Q1 2011 was the eye of the Arab Spring uprising – airlines cancelled or reduced flights and many passengers postponed their travel. So Q1 2012’s increase in revenue is not a true like to like comparison. In addition Etihad’s code shares apparently account for 18% of Q1 2012 revenues.
    Investments in loss making Air Berlin and Air Seychelles would presumably have to be accounted for on an equity basis and could put pressure on the undisclosed and probably marginal profit figure.

    2. Emirates. Hell tomorrow! Oops – I forgot an “o.” On Wikipedia – “Hello Tomorrow is the title of a 2005 Adidas television advertisement, and also the name of the song used in the commercial.” Maybe Mr. Kipp is a globalista? Maurice Flanagan (or a copywriter on his behalf) also said – “Emirates is not just offering a way to connect people from point A to point B but is the catalyst to connect people’s hopes, dreams and aspirations. Emirates is connecting people and cultures, creating relevant and meaningful experiences that are shaping the world.” Maybe just a little bit over the top. For most of us – the 400 people sitting 3-4-3 at the back of the airplane we would just like to get safely and efficiently from A to B with the minimum of stress. As far as I can tell Emirates does not include a comma between Hello and Tomorrow ! Though I am with Kipp and think that maybe there should be !

    3. DWC – the biggest story of the last month was the announcement that DWC will not be fully operational until at least 2027. And that EK will not be moving until at least that date. That will put huge pressure on DXB. They can build new terminals but the problems are with airspace and the fact that the runways cannot be used for simultaneous landings. There is also a clear dispute over when flyDubai will move – at the time of the 2011 airshow fly Dubai was said to be moving soon. Then last week DWC officials announced that flyDubai would move by the start of 2013 only for that to be retracted the following day…it would make sense as EK desperately needs the peak time departure and arrival slots that flyDubai’s 737s now use….but on the other hand EK benefits from flyDubai pax connecting onto the EK fleet. Not sure how that will play out but there must be some interesting discussions behind the scenes.

    4 A380s – EK’s claim for compensation from Airbus for lost revenues due to the wing joint repairs has still to play out. But it has caused some real scheduling issues for EK – with 777s filling in on routes that should be operated by the A380s. From what I have read these are not permanent repairs so there may be additional repair work to do around the end of the year.

    5 EK’s 2011/2012 annual report is dues at the end of April or first few days of May. Anyone want to guess this year’s profit announcement? It will be some way short of 2010/2011’s record number !

    Think that is all for now !


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