Emirates Airline not ready to resume fuel hedging

London // Emirates expects oil prices to stay below US$80 a barrel for the medium term and has no plans to return to fuel hedging.

Emirates is benefiting from ending its fuel hedging strategy in 2009, but in the past the airline’s profitability was hit hard when oil prices soared.

Tim Clark, the airline’s president, said that his treasury team was constantly “on my case, over fuel hedging”, but that he was reluctant to resume the practice, which required people “with a triple first from Oxford and from Harvard”.

“I’m not saying that we won’t ever do it, but it has been very difficult,” he said. “We have managed to trade the airline through [fluctuations in the oil price]. When oil is priced between $115 a barrel and $50 a barrel we can make money.”

Oil prices have plunged by more than 40 per cent since June.

Mr Clark said he believed that the global oil supply was unlikely to be constrained in the short term.

He pointed to production from Iran, where sanctions could soon be lifted, and US shale explorers, who he believed would continue operations at any cost given the billions they had already invested.

Emirates scrapped its fuel surcharge amid the plunge in oil prices, which Mr Clark said the airline was also using to examine new business strategies.

These included expansion to new markets or lower fares in addition to further investment in its product and brand.

“Our prices are very competitive. But I’m not attracted to fighting [price] wars. We have the No 1 airline brand in the world and that does a lot of selling for us,” he said.

Before oil prices fell, fuel accounted for 41 per cent of the airline’s costs. Fuel efficiency continues to be a priority, which Emirates made clear in its choice of Rolls-Royce engines for its 50 new Airbus A380 jets.

Airbus has not yet given Emirates a decision on whether it will build an upgraded ‘neo’ A380, despite being put under pressure by Emirates to do so.

Improving the Airbus fleet is central to Mr Clark’s ambition of carrying 70 million passengers to 180 destinations around the world by 2020. Emirates has said it will order 200 of the new jets if Airbus goes ahead with the update.

Some of the Rolls-Royce orders announced on Friday could be converted for the new craft, Emirates said.

Emirates believes that the Airbus A380 could be the best solution to the constrained aviation infrastructure in many markets, as global air travel recovers from the worldwide downturn.

Speaking of the US airline industry’s attacks on Gulf carriers, he said that it was a “ripple” and dismissed the idea that the bilateral trade agreement between the UAE and US was at risk.

“I don’t believe that the US government would change its Open Skies strategy. They drove it in the first place and it has been the best thing that has ever happened,” he said.

“When the evidence is clearly put in front of them, they will see that no such set of state subsidies exists. It is a ripple, but it is having an effect on the industry, because there is no unanimity on this. Opinion is deeply divided.

Earlier in the week, International Airlines Group, which owns British Airways and Iberia, pulled out of the Association of European Airlines saying it did not agree with the policy of other members towards competition in the skies.

Willie Walsh, the chief executive of IAG, has also made clear his displeasure that American Airlines, a partner in the One World alliance, which includes IAG, has been arguing against liberalisation of aviation markets.

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Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.

The White Lotus: Season three

Creator: Mike White

Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell

Rating: 4.5/5

The Bio

Favourite place in UAE: Al Rams pearling village

What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft

Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans

Best time to swim in the sea: When there is enough light to see beneath the surface

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

How much sugar is in chocolate Easter eggs?

The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
The Cadbury Creme Egg contains 26g of sugar per 40g egg

The smuggler

Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.

Khouli conviction

Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.

For sale

A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.

- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico

- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000

- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950

Test

Director: S Sashikanth

Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan

Star rating: 2/5

The National's picks

4.35pm: Tilal Al Khalediah
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5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

Key facilities

Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills

The language of diplomacy in 1853

Treaty of Peace in Perpetuity Agreed Upon by the Chiefs of the Arabian Coast on Behalf of Themselves, Their Heirs and Successors Under the Mediation of the Resident of the Persian Gulf, 1853
(This treaty gave the region the name “Trucial States”.)

We, whose seals are hereunto affixed, Sheikh Sultan bin Suggar, Chief of Rassool-Kheimah, Sheikh Saeed bin Tahnoon, Chief of Aboo Dhebbee, Sheikh Saeed bin Buyte, Chief of Debay, Sheikh Hamid bin Rashed, Chief of Ejman, Sheikh Abdoola bin Rashed, Chief of Umm-ool-Keiweyn, having experienced for a series of years the benefits and advantages resulting from a maritime truce contracted amongst ourselves under the mediation of the Resident in the Persian Gulf and renewed from time to time up to the present period, and being fully impressed, therefore, with a sense of evil consequence formerly arising, from the prosecution of our feuds at sea, whereby our subjects and dependants were prevented from carrying on the pearl fishery in security, and were exposed to interruption and molestation when passing on their lawful occasions, accordingly, we, as aforesaid have determined, for ourselves, our heirs and successors, to conclude together a lasting and inviolable peace from this time forth in perpetuity.

Taken from Britain and Saudi Arabia, 1925-1939: the Imperial Oasis, by Clive Leatherdale

COMPANY PROFILE

Name: Kumulus Water

Started: 2021

Founders: Iheb Triki and Mohamed Ali Abid

Based: Tunisia

Sector: Water technology

Number of staff: 22

Investment raised: $4 million

A MINECRAFT MOVIE

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Starring: Jack Black, Jennifer Coolidge, Jason Momoa

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Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.

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