One new aircraft every month - EK considers IPO
 

EMIRATES Airline is considering a public flotation on the Dubai Financial Market, in a bid to raise cash to fund its ongoing expansion strategy. “We have one new aircraft coming every month for the next five to six years and that takes a lot of financing," said Sheikh Ahmed. Its fleet is now 73 strong but will grow to nearly 200 by 2012, with one new aircraft being delivered each month.
Sunday, 24 April, 2005

Check for more details:
http://www.itp.net/business/news/det...4894&category=

Unbelievable, one new aircraft every month. I wish them all success with their future plans. I hope they keep service standards high... :-)

I wonder how safe and stable is this company. I cant imagine Emirates making profit in this cut throat airlines business while the rest are struggling to breathe

Emirates have performed extremely strongly for some years now with a profit margin the best of the long-haul majors and not far shy of the short-haul low cost operators(a very different busienss).

While the US carriers are still struggling air traffic almost everywhere else is rebounding (along with yields).

Will be interesting to see how it works out but I reckon Emirates will be an increasingly big player in years to come.

My prediction is that this will never happen. Emirates is not so much a business, as it is a massive PR campaign for Dubai and the Royal Family. Operational decisions are made on this basis, and this has accrued to the benefit of EADS, Boeing, and travellers, but to the detriment of their competition who must live in the real world of return on equity.

Financially speaking, Emirates is a black box, and nobody really knows whether the company makes money or not -- regardless of what they say. An IPO is therefore extremely unlikely, as this is not the type of investment private capital looks for. That's ok for Emirates -- for now -- as capital is freely available to it, regardless of expected return, from the royal family. If this ever changes, and these subsidies were to become unavailable, a major revamp and rationalization of the airline would be necessary to sucessfully privatize the company to fund its losses and need for capital. Emirates standing as a "player" in the arena of the global airline industry will be directly related to Dubai's ability to fund its operations.

I agree, it would be a major surprise if Emirates actually goes for an IPO. But what do we really know about the current finance of EK? I just recently read a very interesting article:
"As Emirates remains government owned and is highly profitable, it is open to the criticism that it is government subsidised. However, review of the (PWC) audited IFRS accounts does not provide any obvious evidence of government intervention. The primary driver of the current cost advantage appears to be impressive labour productivity and low average wage costs. The study found little direct evidence of any subsidy and believes that the competitive strengths of the group can be explained by the underlying business model rather than special treatment. Trade unions do not exist in Dubai and strikes are effectively forbidden, which is clearly an advantage for an airline, given the high structural leverage of labour. Emirates uses a high proportion of expatriate labour, which tends to be highly skilled and is increasingly mobile."

link: http://nation.ittefaq.com/artman/pub...le_17721.shtml

This is just propaganda though. The audit proves nothing at all. The planes -- and they have lots of them -- are an off balance sheet item that they essentially get for free from the government. This is a very major subsidy, that no major airline enjoys. One would suspect that their landing fees and facilities rental at DXB do not begin to cover the true costs.

Emirates might be "sucessful" in that it gives the royal family -- and travellers and plane exporters -- what they want. A "sucessful" business though, it is not, or likely to be.