Investors Day. Ram C. Menen. Divisional Senior Vice President Cargo Emirates. 6 th September,2011, Billund. skycargo.com

Transcription

1 Investors Day Ram C. Menen Divisional Senior Vice President Cargo Emirates skycargo.com 6 th September,2011, Billund

2 The International Airline of the U.A.E.

3 B777F

4

5 DUBAI

6 Fast Facts Fiscal Year 2010/11 Total revenue US$ 15.6 Billion Net profit US$ 1.5 Billion Cargo revenue US$ 2.4 Billion Cargo volume: Tons 1.8 Million Pax carried 31.4 Million Total employees (Group) 56,768

7 Dynamic & High Growth Airline A steadily growing fleet with new aircraft allows to extent the network and increase frequencies 157 aircraft in service incl. 8 freighters 200 aircraft on order incl freighters Wide body aircraft only in global network Complemented by scheduled road feeder services linking regional offline points Multiple frequencies to many destinations allow flexible planning and fast connections via Dubai

8 Emirates SkyCargo Performance Tonnage - Year on Year *

9 We Carry Passengers too

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11 A380 First Class

12 A380 First Class Spa

13 A380 Lounge

14 A380 Business Class

15 A380 Economy Class

16 Cargo Mega Terminal at Dubai Hub State- Of-The-Art Cool Chain Handling In full operation since Feb 2008 One of the most technologically advanced cargo terminals in the world Combined with enhanced global procedures has led to extremely high reliability - failure rate close to zero Over 1.3 million tonnes annual throughput sqm handling area Dedicated handling and storage for temperature-sensitive products

17 State-of-the-art Cargo Mega Terminal at Dubai Hub

18 Al Maktoum International Airport (DWC)

19 Pharma Air Trade Outperformed Total Market Growth Pharmaceuticals historic air trade growth proved to be quite strong, and was far less volatile than the total air trade market Air trade growth YoY growth (%) 15 Air trade of pharmaceuticals Tons (K) Avg. 6.3% Avg. 1.6% % 6.5% Pharmaceuticals All other commodities Pharmaceutical air trade is expected to rise with 6-7% in the next 5 years Source: Seabury Global Trade Database

20 Innovations Cool dollies SkyBox White Cover

21 Getting Comfortable With Technology

22 SkyChain and e-freight SkyChain our industry leading global reservation and business management system is being further developed to allow automated temperature mapping and tracking, to capture and display temperature information against shipment records and status updates. Emirates SkyCargo has taken the lead among IATA carriers to implement e- freight

23 Source: IATA Economics: e-chartbook Q World Air Cargo Traffic

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25 Source: IATA economic analysis World Air Cargo Traffic

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27 Economic Cycles This Is What We Predicted in May 2010 % Change in Cargo Traffic, Year-Over-Year 20% 15% 10% 5% 0% -5% -10% 12.1% % 9.9% % 1 st Oil Induced Economic Crisis 10.7% 10.1% 9.8% 3.7% % 5.8% 5.4% nd Oil Induced Economic Crisis 2.4% 10.5% % 12.2% 12.1% 1.9% % 9.6% % % 2.6% Gulf War I Recession 9.3% % 10.3% % 12.2% % 6.3% 1999 Asian Economic Recession % Traffic Change Actual Traffic, Revenue Tonne Kilometers (RTKs) Source: Boeing : 2008 world air cargo traffic data + Ram Menen 8.5% % 6.5% 3.2% % 3.2% 1.7% 2005 Technology Market Collapse, Terrorists Attacks, SARS, Gulf War II Recession Since 1978, 5.8% Since 1988, 4.8% 5.1% 2007 Since 1998, 3.4% -5.9% % 10.0% 2011 Oil Shock, Financial Crisis 7.0% 6.0% 5.0% 4.0% World Air Cargo Traffic, RTKs, billions

28 Economic Cycles Our Revised Forecast in Feb 2011 % Change in Cargo Traffic, Year-Over-Year 25% 20% 15% 10% 5% 0% -5% -10% 12.1% 10.5% 9.9% Source: Boeing + RM/EK 1 st Oil Induced Economic Crisis 7.8% 10.7% 10.1% 9.8% 3.7% % 5.8% 5.4% nd Oil Induced Economic Crisis % 12.2% 12.1% 10.5% 9.8% 9.6% 2.4% % Gulf War I Recession 0.9% % 2.6% 12.5% 12.2% 10.3% 9.3% Asian Economic Recession Since 1978, 5.8% 7.1% % 6.3% % Technology Market Collapse, Terrorists Attacks, SARS, Gulf War II Recession Since 1988, 4.8% % 6.5% 3.2% % % Traffic Change Actual Traffic, Revenue Tonne Kilometers (RTKs) 3.2% 1.7% 2005 Oil Shock, Financial Crisis Since 1998, 3.4% 5.1% % % 20.0% 7.0% 6.0% 5.0% 5.0% 4.0% World Air Cargo Traffic, RTKs, billions

29 Economic Cycles Extreme Unpredictability 25% 1 st Oil Induced Economic Crisis 2 nd Oil Induced Economic Crisis Gulf War I Recession Asian Economic Recession Since 1978, 5.8% Technology Market Collapse, Terrorists Attacks, SARS, Gulf War II Recession Oil Shock, Financial Crisis 250 % Change in Cargo Traffic, Year-Over-Year 20% 15% 10% 5% 0% -5% 13.3% 12.1% 12.2% 12.1% 10.5% 10.7% 9.9% 10.1% 10.5% 9.8% 9.6% 9.8% 7.8% 6.1% 5.8% 5.4% 3.7% 2.4% 1.9% 0.9% % Since 1988, 4.8% 20.0% Since 1998, 3.4% 12.5% 12.2% 12.7% 10.3% 9.3% 7.1% 2.6% 8.5% 6.3% 6.5% 3.2% 0.1% 5.1% 3.2% 1.7% % -5.9% World Air Cargo Traffic, RTKs, billions -10% Source: Boeing + RM/EK % Traffic Change Actual Traffic, Revenue Tonne Kilometers (RTKs) -10.0% 0

30 Economy Is Held To Ransom By Political Agenda

31 Weak US Dollar

32 Source: : US Department of Commerce Inventory to Sales Ratio (US data)

33 Inventory to Sales Ratio (US data) Source: US Department of Commerce

34 At A Certain Value Per Kilo, Air Freight Will Be A Cheaper Means Of Transport Than Maritime Crossover Point between air freight and sea freight Crossover Point Air Charges + Air Interest = Sea Charges + Sea Interest Total Sea Cost Transportation Cost Total Air Cost Ocean is cheaper Air is cheaper Value of the Cargo (USD/kg) In Theory, by Making Trade-offs Between Transport-Related and Inventory-Related Costs, Firms Seek to Minimize Total Distribution Cost (TDC) Source: McDonnell Douglas, Air Freight Decision Tool, circa 1973

35 Crude Oil & Jet Fuel Price

36 Good News

37 Financial Risks to the Airline Industry The airline industry is highly capital, labour and technology intensive making risk management very complex. Asset Regulatory Economic Risks Financial Risks Credit Risk Fuel Prices Interest Rate Increases Exchange Rate Fluctuations Cash Flow Risk

38 Going Forward..

39 Ingredients For Success Growth of a market depends on market access Liberalized market access is critical to providing economic capacity Ideal environment : Free skies Free seas Free trade Free movement of capital ready access to capital

40 Focus Has To Be On: Business partnerships and relationships Looking for operational efficiencies Provision of sustainable capacity to ensure right capacity, at the right time, at the right place to allow unconstrained growth Cost efficiency thru better transparency and transactional efficiency: e-freight

41 e-freight : Vision to Reality" 41

42 Change in mind set is critical if you want to be in the future!...

43 Secure Freight : How will I recognize it? Secure carrier Haulier Freight Forwarder Haulier Departure Airport Shipper Ground Handler Transhipment Airport Each consignment will be tamper-evident & have electronic audit trail Each consignment recognised as Secure Freight via e-code (SPX / SCO) Operators certified and then registered

44 Challenges: Environmental Issues -ETS

45 Emirates Environmental Commitment.a few examples Operating the world s largest fleet of Boeing s eco-efficient 777 s The increasing Airbus A380 fleet saving fuel, emissions and reducing noise by up to 30% Pioneered by Emirates: using innovative navigational technology and journey management, creating new routes across the skies to save precious time, fuel and emissions A flight tailored on-board water saving programme leading to reduced weight and positive environmental impacts

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47 The Next Frontier Source;of data: Wikipedia

48 Political Situation

49 Source; Boeing WACF Long Term Forecast Is Bright

50 Source: Boeing

51 The Shape Of Things To Come

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53 Thank You skycargo.com