Dubai carriers Emirates and flydubai to integrate operations

Emirates operates a wide-body fleet of 259 aircraft, flying to 157 destinations including 16 cargo-only points. (Reuters)
Updated 18 July 2017
0

Dubai carriers Emirates and flydubai to integrate operations

LONDON: Emirates and flydubai have confirmed plans to integrate their operations as they respond to tough competition among global airlines.
The tie up means that the pair can mop up excess capacity on both of their networks as a global glut of planes forces fares lower.
Both airlines will continue to be managed independently, but will leverage each other’s network to scale up their operations and accelerate growth, Emirates said.
The partnership goes beyond code sharing and will include network integration as well as the coordination of scheduling.
“Both airlines have grown independently and successfully over the years, and this new partnership will unlock the immense value that the complementary models of both companies can bring to consumers, each airline, and to Dubai,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Group and chairman of flydubai.
The two airlines also plan to develop their hub at Dubai International, aligning their systems and operations.
Emirates operates a wide-body fleet of 259 aircraft, flying to 157 destinations (including 16 cargo-only points) while flydubai has 58 new-generation Boeing 737 aircraft flying to 95 destinations. The current combined network comprises 216 unique destination points.

 

By 2022, the combined network of Emirates and flydubai is expected to reach 240 destinations, served by a combined fleet of 380 aircraft.
They said they were also working on a number of initiatives spanning commercial, network planning, airport operations, customer journey, and frequent flyer programs alignment.
The first enhanced code-sharing arrangements are set to be rolled out in the last quarter of 2017. Further details will be communicated as they become available.
The price of global air travel was about 10 percent cheaper in the first quarter of 2017 than a year ago after adjusting for inflation, according to data from the International Air Transport Association (IATA).
That has hurt airlines based in countries with dollar pegs because of the continued strength of the greenback, which has helped many rival European carriers offer more competitive fares.
IATA says that in seasonally adjusted terms, international traffic through the Middle East has been tracking sideways since the start of the year.
As the competitive environment heats up, Gulf carriers are being forced to take a closer look at their cost structures to fend off fare-slashing by rivals.Aggressive fare discounting by competitors, a slowing economy at home and regional instability have hit both airlines.

The tie up between Emirates and Flydubai means they can make better use of idle planes while also improving the connectivity they can offer clients.
But it also improves its competitive position alongside Etihad Airways and Qatar Airways by adding narrow-body planes to deploy on some routes.
“Etihad, Qatar and Turkish operate narrow-body aircraft. For a nearly direct comparison, Etihad and Qatar have been able to reach destinations Emirates cannot because it does not have smaller aircraft,” added Horton.

 


Online fashion retailer Boohoo’s sales almost double

Updated 25 April 2018
0

Online fashion retailer Boohoo’s sales almost double

LONDON: British online fast-fashion retailer Boohoo beat forecasts with a 40 percent jump in annual profit and an almost doubling of revenue as its mainly younger customers snapped up its budget-friendly designs.
The company, which imitates the latest fashions and sells them at “pocket money” prices to mainly twentysomethings, said it had made a strong start to this year, sending its shares as much as 18 percent higher.
Its robust performance and that of bigger online peer ASOS highlights how the Internet is reshaping the British retail landscape and the clothing sector in particular.
“Against a backdrop of difficult trading in the UK clothing sector, the group continued to perform well, gaining market share in the expanding online sector,” said joint chief executives Mahmud Kamani and Carol Kane.
Founded in Manchester, northern England, in 2006, Boohoo has expanded rapidly, purchasing the PrettyLittleThing and Nasty Gal brands at the beginning of last year.
The pure Internet players are bucking a challenging backdrop for UK consumers, outflanking and taking market share from traditional rivals burdened with big store estates.
Last week the 240-year old Debenhams department store chain reported a 52 percent slump in first-half profit and warned on the full-year outlook for the second time in four months.
In stark contrast, Boohoo raised sales and profit guidance four times in 2017-18.
The company made a pretax profit of £43.3 million pounds in the year to February 28, up from £30.9 million a year earlier and topping the £39.4 million expected by analysts, according to Reuters data. Revenue soared 97 percent to £579.8 million, ahead of company guidance.
The stock has come off from 273 pence in June last year, on concerns profit growth will be held back by a step-up in investment.
However, Boohoo said on Wednesday it could invest more in systems, technology, warehouses, distribution and marketing, while still delivering substantial sales and profit growth.
Capital expenditure in 2018-19 would be £50 million- £60 million. Revenue growth was forecast at 35-40 percent, with a profit (EBITDA) margin of 9-10 percent.
Looking beyond 2018-19 it forecast sales growth of “at least” 25 percent, whilst maintaining a 10 percent EBITDA margin.
“Critically, fears of a ‘margin reset’ have not been realized,” said analysts at Peel Hunt, reiterating their “buy” recommendation.
“Changes to distribution plans means the next move is likely to be overseas,” they said.