Thomas Cook’s demise weighs heavily on Emirates’ European markets and in particular its airport services division dnata, Emirates has been impacted ‘in no small amount’ by the demise of Thomas Cook, which went into liquidation last month.
The airline’s president, Sir Tim Clark, said this morning that the group’s dnata arm had been exposed to the collapse of the holiday operator and expects its half-year results to be impacted.
Thomas Cook went out of business after it failed to secure a deal with creditors. The liquidation saw hundreds of thousands of holidaymakers stranded abroad in the immediate aftermath.
At The Aviation Show in Dubai
Speaking at The Aviation Show in Dubai, Sir Tim confirmed that group performance is strong and that Emirates is “significantly” ahead of where it was the same time last year.
But the airline has adjusted its capacity in the face of “flattening of growth”, he said.
“At a group level we’ve had to deal with a number of things, not least of which is the fallout from the Thomas Cook exposure,” Sir Tim said.
Situation in European Markets
“We’ve found that particularly in our European markets, mainly in the UK, that there was a degree of exposure which we’re still trying to get some kind of estimation on. That’s not helped.”
Sir Tim said that airport services provider dnata, which consists of ground handling agents, caterers and distribution entities, did a lot of its business with the now defunct Thomas Cook.
“The assessment of the exposure is still going on but it’s not a small amount. We’ll have to take it in in the first half of the year, we’ll see,” he said.
Commenting on Emirates’ strategy in the last year, Sir Tim said that it has reduced capacity and is running at “about the same capacity or slightly less” than this time last year.
He added that Emirates has rationalized a lot of routes and evaluated the deployment of its assets on the routes, making sure they are fit for purpose.
“The fact is that with the global economy in a little bit of a tricky position at the moment, we’ve now adjusted and aligned our capacity to where we think things are in the short to medium term. And that has seen a flattening of our growth while we make an assessment about what we’re going to be doing in the future.”