Emirates considers flydubai tie-up, order deferrals as profit woes continue – report

Dubai airline Emirates could reportedly take measures including deferrals to its vast plane order book and even integration with low cost carrier flydubai as geopolitical issues continue to weigh on its finances.

Last month, Emirates posted an 82 per cent drop in annual profit which it blamed on a series of “destabilising events” including Britain’s vote to leave the European Union and restrictive travel policies in the United States.

Read: Emirates airline posts 82% drop in annual profit

The Financial Times quoted Emirates president Sir Tim Clark as saying the airline was already struggling to find homes for the 13 aircraft it had taken off of US routes after a fall in demand linked to President Donald Trump’s travel bans and new restrictions on large electronics.

Read: Dubai airline Emirates reduces flights on five US routes as demand drops

“Finding homes for all of those has not been easy, and I will be frank and say that if we do not find homes for them, we’ll put them on the ground,” he said, according to the publication.

This on top of the airline’s vast order book of 219 Airbus A380s and Boeing 777s meant the Emirates president did not rule out deferrals.

“If you’d asked me that three or four years ago I’d have said absolutely not. But I cannot predict what is likely to happen in our markets today,” Clark was quoted as saying.

An internal memo seen by the FT suggested there was little sign of conditions improving with management telling staff the airline’s forward bookings were particularly worrying. “Make no mistake: we’re going through an extremely difficult period,” one line read, according to the publication.

In light of these troubles and the likely impact of the recent halting of all flights between the UAE and Qatar Clark said a tie-up with government-owned short-haul carrier flydubai made sense, according to the FT.

Read: Emirates, Etihad, Flydubai, Gulf Air and Air Arabia to suspend Qatar flights

“The convergence of the airlines in their operations, in their marketing, makes sense. One of the big issues is the slot availability. We’re all running parallel operations and slots are very precious, so it wouldn’t make too much sense to continue to do that,” he was quoted as saying.

Clark also said the airline could seek new revenue opportunities by charging for more full-service options after introducing fees for pre-selecting seats on some economy fares.

Read: Dubai’s Emirates to begin charging for seat selection

“We have started the unbundling and that’s been fairly successful. I think we’ll probably do more of that. We will do seats with extra baggage, whatever it may be,” he added.