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Friday, November 10, 2017
profit drop
with ­savings
Parent company axes 3,000 jobs
LONDON: Emirates airline
reversed a sharp decline in its
financial performance in 2016,
unveiling an 111 percent
profits jump in the first half of
2017 to $452 million, off the
back of a softer dollar and a
cost-cutting drive that saw the
parent company axe 3,000 jobs.
But there were still severe headwinds,
indicated Emirates chairman Sheikh
Ahmed bin Saeed Al-Maktoum — mar-
gins continued to face strong downward
pressure from increased competition
and rising oil prices, as well as “weak
economic and uncertain political reali-
ties in many parts of the world.”
In its 2016/17 financial year, Emirates
— the biggest airline in the Middle East
— reported its first full-year profit
decline for five years as subdued travel
demand saw earnings plunge 82 percent.
An inflated US currency, political and
security issues, as well as airline overca-
pacity, were cited as factors behind the
grim trading picture last year.
But in the first six months of 2017/18
to end-September, Emirates reported
that its average passenger seat factor —
a key metric for airlines which measures
how many seats are filled on flights —
rose to 77.2 percent, compared with last
year’s 75.3 percent. The airline carried
29.2 million passengers between April 1
and Sept. 30, 2017, up 4 percent from the
same period last year.
The airline said: “The easing of the
strong US dollar against other major
currencies helped our profitability. We
are also seeing the benefit from various
initiatives across the company to
enhance our capability and efficiency
with new technologies and new ways of
In the past six months, employee
numbers at Emirates Group — which
includes its air freight and ground han-
dling operations—reduced by 3 percent
compared to March 31 2017, from an
overall staff count of 105,746 to 102,669.
Airline employee numbers were cut
from 64,768 to 63,039.
“This was largely a result of natural
attrition together with a slower pace of
recruitment, as various parts of the busi-
ness adopted new technologies, stream-
lined business processes and re-allocated
resources,” said Emirates.
Airline revenue of $12.1 billion was up
6 percent compared with $11.4 billion
reported during the same period last
Emirates said it continued to invest in
the most advanced wide-body aircraft to
improve overall efficiency and provide
better customer experience. During the
first half, Emirates received 10 wide-body
aircraft — four Airbus A380s, and six
Boeing 777s, with nine more new aircraft
scheduled to be delivered before the end
of the financial year. It also retired five
older aircraft from its fleet with further
four to be returned by March 31, 2018.
Emirates launched two new passenger
services to Zagreb (Croatia) and Phnom
Penh (Cambodia).
As of Sept. 30, Emirates’ global net-
work spanned 156 destinations in 84
countries. Its fleet stood at 264 aircraft
including freighters.
In July, the airline announced a part-
nership with Flydubai, leveraging both
airlines’ complementary networks to
open new city-pair routings for custom-
ers, and optimize operations at Dubai
International Airport. Emirates also
announced it would extend its successful
partnership with Qantas for a further
five years that will offer travelers more
flight choices to and from Australia and
New Zealand.
Overall profit for dnata, Emirates’
airport handling and airlines services
division, was up by 20 percent to $80
million. Across its operations, the num-
ber of aircraft handled by dnata
increased by 11 percent to 330,317, and
it handled 1.5 million tons of cargo, up
25 percent.
This reflected new customer contracts
won across the network, and expansion
to new locations such as Rio de Janeiro
and Amsterdam (ground handling) as
well as the overall upturn in global cargo
Airbus nears deal to sell over
30 A380s at Dubai Airshow
European plane maker trails rival Boeing in orders
for this year ahead of Mideast aviation showcase
PARIS: Airbus is close to a deal worth at
least $14 billion to sell over 30 of its
A380 jetliners to Dubai’s Emirates to seek
to secure production of its struggling
superjumbo until the middle of next
decade, two people familiar with the
matter said.
The deal, if confirmed, is expected to
be announced at the opening of the
Dubai Airshow on Sunday.
Airbus said it does not comment on
commercial discussions.
A spokeswoman for Emirates, which is
by far the largest A380 buyer with 142 on
order and 100 already delivered, said:
“We do not comment on rumors or
The airline’s chairman, Sheikh Ahmed
bin Saeed Al-Maktoum, said last week it
hoped to order more A380s at the Nov.
12-16 event.
The deal comes as Airbus trails rival
Boeing in orders this year, with 35 per-
cent of their combined tally ahead of the
industry’s largest Middle East event.
That gap widened as Boeing
announced orders and commitments for
300 jets during a visit to China by US
President Donald Trump on Thursday.
The 544-seat European A380 entered
service amid huge fanfare in 2007, but
its future has been thrown into doubt by
sluggish sales as airlines turn to efficient
twin-engined jets.
Airbus has not sold a four-engined
A380 since March 2015. So far this year
it has posted only two cancelations.
Airbus has cut production of the A380
to eight per year from a peak of 30 but
needs to secure more sales to hold pro-
duction at this rate. It recently launched
a program of improvements called
A380plus to make the double-decker jet
more efficient. Airbus CEO Tom Ender
has said he believed it would be produc-
ing the superjumbo 10 years from no
and was working on sales.
Airbus has almost 100 A380s left on
order, but roughly half of these are see
unlikely to be delivered as airlines alte
their plans. Of the rest, Emirates is the
dominant customer.
“On the basis of the current order
book its future is not terribly exciting
but an order for another 30 or so would
underpin production to the middle of the
next decade,” said Sash Tusa, aerospac
analyst at UK-based Agency Partners.
Analysts said Emirates also has a stake
in the future of the A380 because it has
built a large part of its network an
brand around the aircraft, alongside th
Boeing 777, and could see the value of it
fleet suffer if the program fades away.
Its chief executive has praised the air
craft’s ability to pull in passengers to its
Dubai hub and lamented patchy interes
from other airlines.
But executives at many airline
remain worried about the challenges of
filling such a large plane.
Sheikh Ahmed bin Saeed Al-Maktoum, Emirates’ chairman and CEO, Tom Enders, CEO of Airbus and Tim Clark, president of Emirates Airline, descend
the steps of an Airbus A380. Airbus is expected to announce a major order for the aircraft at the Dubai Airshow which starts on Sunday. (Reuters)
Hikma in dispute with FDA over generic drug Advair
Jordanian drugmaker in row over plans to launch lung product in the US
LONDON: Hikma Pharmaceuticals is
in dispute with the Food and Drug
Administration (FDA) over plans to
GlaxoSmithKline’s popular lung drug
Advair in the US, the drugmaker said
on Thursday, when trimming 2017
revenue guidance for its generics busi-
ness for a third time.
The dispute between the Jordan-
based firm, its partner Vectura and the
US FDA, delays any eventual approval
of the generic version of the drug.
Hikma, which makes and markets
branded and non-branded generic and
injectable drugs, said it expected reve-
nue of around $600 million and a core
operating margin in the low single-
digits from its generics business.
In August it had lowered its gener-
ics revenue guidance by $50 million
to about $620 million citing higher
pricing pressures in the industry,
having slashed it to $670 million
from an initial $800 million last
The company, which has been hit by
higher price erosion levels than the
rest of the industry, has been re-nego-
tiating its contracts with suppliers and
third-party vendors to cut costs to try
to boost profitability.
“We expect these market conditions
to persist in 2018 and are actively
pursuing new commercial opportuni-
ties and focusing on the execution of
our pipeline to help offset continuing
price erosion across the industry,” it
said in a statement. The company,
which cut its full-year guidance in
May to the range of $2 billion-$2.1
billion from $2.2 billion, said in
August that it expected 2017 revenue
to be at the lower end of the range at
$2 billion.
Hikma reiterated its 2017 revenue
expectations on Thursday.
Hikma’s lower guidance in May fol-
lowed a decision by US regulators not
to approve its generic version of
GlaxoSmithKline’s blockbuster lung
drug Advair, citing “major” issues with
the application.
Hikma said it expected the dispute
process with the FDA to be completed
in the first quarter of 2018.
BEIJING: China signed an agreement
yesterday to buy 300 airplanes from US
aerospace giant Boeing worth $37 bil-
lion, as part of a multibillion-dollar
raft of deals announced during
President Donald Trump’s visit to
The agreement for China Aviation
Suppliers Holding to buy the single-
aisle and twin-aisle aircraft was among
the more than $250 billion in agree-
ments announced at a ceremony
attended by Trump and Chinese leader
Xi Jinping.
A Boeing statement said the agree-
ment includes “orders and commit-
ments” to buy the aircraft, but it did
not give a further breakdown.
In September 2015, Boeing had
already received an order from CASC
for 300 aircraft valued at a record $38
billion at list prices.
Boeing and European rival Airbus
are competing heavily in China, the
world’s second aircraft market, with
the US company forecasting that the
Asian giant needs over 7,200 commer-
cial aircraft in the next 20 years.
China, meanwhile, has developed its
own medium-haul C919 in a bid to
challenge the Airbus-Boeing duopoly.
China signs $37bn deal to buy 300 Boeing planes
We are
seeing the
from various
initiatives across
the company
to enhance our
capability and
efficiency with
new technologies
and new ways of
Emirates statement
Hikma Pharmaceuticals plans to launch a generic copy of GlaxoSmithKline’s
popular lung drug Advair in the US. (Reuters)
We are
new commercial
and focusing on
the execution of
our pipeline.
Hikma statement
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