International airlines face a “perfect storm” from high fuel costs, a slowing global economy and volatile exchange rates that could see many carriers forced to downsize, Tim Clark, President of Emirates airline said in an interview Tuesday.
“It’s a perfect storm of adversity now facing airlines,” Clark said. “The euro is going south, the pound is going south, fuel costs are still too high.”
Clark, a key and long-serving executive at Emirates, said he wasn’t surprised that Qantas Airways on Tuesday announced a sharp drop in profits and cautioned that many international carriers could be forced to retrench due to the difficult trading conditions.
He also dismissed reports last month that the Dubai-based airline was interested in taking a stake in Qantas, after Abu Dhabi-owned Etihad Airways said Tuesday that it acquired a 4 per cent stake in Virgin Australia.“We’re not up for buying a stake in Qantas,” Clark said.
Like Qantas, Emirates has struggled amid tougher trading conditions and higher costs especially for fuel.Last month, the airline said net profit fell 72 per cent for its latest fiscal year after taking a $1.6 billion (Dh5 billion) hit from high fuel costs.
Clark said that debt markets had become tougher for all airlines and that Emirates isn’t sure that it needs refinance a $550 million Islamic bond that matures this month.from Gulf news.