Emirates sees revenues hit on Middle East unrest and Japan crisis

Emirates President Tim Clark stated unrest in the Middle East and northern Africa could hit revenue at Emirates by 3-5% (Reuters, 31-Mar-2011). He added that the present situation in Japan is having a negative influence on that market, adding that it could fall by 20-40%. He expected a huge influx when reconstruction work starts. Mr Clark stated the carrier has been able to shift capacity away from affected Middle East/African countries and expects business in Japan to bounce back. However, Mr Clark stated uncertain business conditions had not affected Emirates' financing or fleet expansion plans, adding it has funding in place for all the A380s it will have delivered until Mar-2012.

Emirates: "Even when the world's banking system was under huge threat in 2009 and 2010 we had no problem in financing our aircraft because we are considered gilt and that is without government guarantees ... it is simply based on the fact that we have USD4bn on our balance sheet, we have a very strong record of profitability, we have a good business model. The bankers are very relaxed about debt provision for what we do," Tim Clark, President. Source: Reuters, 31-Mar-2011.

Emirates: "In the early stages it was taking us down 5 or 7 percentage points for seat factor. When we realised it wasn't a flash in the pan - that it was going to stay with us - we obviously had to stop flying to Libya, we reduced Tunis, we reduced Cairo. We brought Cairo back in again, by the way ... If it continues we may be down 3 to 5% in income, if that. If we had left it as it was, it could have been 3 to 5%, but as we returned the capacity ... we restored that, so we are now back up to high 70s, low 80s seat factor and of course in April as we go though the Easter period we are completely sold out," Tim Clark, President. Source: Reuters, 31-Mar-2011.

Emirates: "This has been a profound shock to everybody in Japan. I'm not sure whether they have got the appetite to go overseas and trade or go as tourists. I don't think outbound Japan is going to be very strong. I think the Americans will avoid Japan for quite a long time simply because of the Chernobyl effect and the perception issues. I think that market could be 20, 30, 40% down, if the truth be known. I would say until the end of this year it's not looking good. Surprisingly [Japanese airport] Narita was at 75% seat factor last week for us. You've got lots of people going out, not so many people going in, but there is still travel going on. We'll stay there as long as it safe to do so," Tim Clark, President. Source: Reuters, 31-Mar-2011.