Emirates Claims Strong Finances

Dubai's state-owned Emirates Airlines, a passenger and cargo carrier, said it will not be forced to cancel any aircraft orders following the debt crisis afflicting the Persian Gulf emirate.

"We are all a bit shocked by what's happened and the global fall out," after state holding company Dubai World sought a six month debt moratorium, Emirates president Tim Clark told London's Sunday Telegraph newspaper.

But, Clark said: "I am confident the airline will not be affected by this."

Clark said Emirates does not plan to scrap any orders for new planes and said the carrier's finances will not be impacted by the crisis.

"We have independent sukuks [Islamic bonds] and bonds which are maturing in 2010 and 2011," Clark said." I know people expect us to repay or finance them on schedule and we will, most absolutely."

"If there is more turbulence, then we will moderate our growth to account for this but we're not going to stop growing. This is a great business," Clark said.

Emirates has one of the world's biggest order books, including 58 Airbus A380 super jumbos, more than any other airline, seventy A350s and twelve Boeing 777s -- worth an estimated $35 billion at list prices.

Emirates Skycargo is the world's eighth largest air freight carrier, flying 1.3 million tonnes of cargo in fiscal 2007-2008.

The carrier, which operates nine freighters, said earlier in the year it would boost the number of cargo flights by 14 percent and increase capacity by 17 percent in 2009, in sharp contrast to rival airlines which slashed capacity as demand shrunk.

Middle East air cargo carriers are outperforming their rivals in other regions, with traffic surging 18.4 percent in October from a year ago, according to the International Air Transport Association. This compares with an 11.3 percent decline in Europe and a 0.5 percent increase in North America.

Emirates vice chairman Maurice Flanagan said net income in the second half ending March 31, 2010, will exceed the $205 million booked in the first six months and likely will top $1 billion next year.

Industry analysts, however, have questioned how many of the planes ordered by Emirates will be delivered. They also suggest Dubai may have to offer Emirates as collateral in order to get help from neighboring Abu Dhabi, possibly through a merger with the oil rich sheikhdom's Etihad Airways.

Contact Bruce Barnard at brucebarnard47@hotmail.com.