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Emirates will offer insurance to the airline’s passengers to convince them to fly into or through Dubai despite multiple governments advising against travel to the region.
It would offer to fly people home — using other airlines if needed — to allay fears that travellers will become stranded if the conflict restarts, the carrier’s president Tim Clark said in an interview.
Emirates has scrapped previous earnings targets and would be happy to break even in its financial year if the war continued, he added. Last week the airline made a small profit after restoring about 80 per cent of its pre-conflict services.
Its planes are three-quarters full on average, though some flights from London are “bursting at the seams” despite official government advice that means travellers cannot get insurance for their trips.
Clark also predicted that the crisis, which has seen jet fuel prices double, would lead to a “complete rethink” of the global oil distribution market.
He also said the carrier was still committed to its fleet of four-engine A380 aircraft even if fuel prices remained high. The aircraft remained “an enormous cash generator and profit generator”, Clark said. “The most important thing for the carrier is that it serves the needs of the emirate and two, that we can keep ourselves cash positive.”
More than three months after the conflict started, several countries still have no-fly recommendations, which means travellers cannot get insurance for trips to or through the Gulf.
Despite this, about 40,000 people a day are transferring through Dubai’s airport. The number is down from approximately 100,000 before the conflict began but “growing at pace”, said Clark.
“I think people can see what we’re doing, can see that it’s OK to transit Dubai and go on to all the other places.”
Clark said the airline was working with insurance companies to roll out its own “reasonably priced” product to guarantee “we would get you back irrespective [of whether it’s] on Emirates or not”.
“I think one of the big concerns is that if they get caught overseas and they can’t get back,” he said. The group is working with insurance companies “to do the right thing”.
Emirates reported a profit of $6.3bn in the 12 months to the end of March, a figure that would have been $7bn without the groundings during March, he said.
The return of passengers has been quicker than expected. Last week’s profit “wasn’t in the plan at all”, he added. The airline was “well ahead of our dreadful loss forecast” for the first quarter, which runs to the end of June. He said the carrier breaking even at this financial year to March 31 would be “OK” as long as it was cash-positive.
Clark was in London when the conflict broke out and took the decision to ground services while he stood in the cockpit of a flight in Heathrow trying to return.
In the first days, as governments around the world tried to repatriate stranded citizens, he told UK foreign secretary Yvette Cooper that Emirates was bringing about 3,000 people a day back to the UK.
Emirates restored services in four days after the conflict started and was quickly back up to 40 per cent of its capacity despite Dubai still being attacked daily.
Dubai intercepted “about 98 per cent” of the “nearly 3,000 drones, missiles and cruise missiles coming at us”, he said. “It was clear that they had a handle on this . . . so we were able to operate the flights” in narrow air corridors patrolled by military jets.
Initially, flights carried an additional five hours’ fuel in case they needed to divert. Some flights had to return or divert to other airports, or spend hours in holding patterns over neighbouring Oman.
One strike hit the airport, grounding operations again, but Clark said the airline’s actions had always been safe.
“At no point would I have allowed, nor would any of those guys, compromise our safety of operation,” he said.
Clark, who is British, added: “Did I feel unsafe? Well, if you or I were still sitting there and things were flying around you, you’d probably think, well, this is interesting.”
But he stressed that Dubai “learned a lot” from the 12-day war last year, and had extensive experience of violence and threats of violence.
“I’m not saying we’re battle-hardened, but we’re very capable of making the call whether it’s safe to operate in an aeroplane or not.”