Wednesday, May 23, 2012

--Chairman has a "positive outlook" for current fiscal-year profits

--Airline yet to decide on hedging against higher fuel prices

--Emirates will seek compensation from Airbus after grounding some of its A380s

Leila Hatoum

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--The chairman of Emirates Airline remains positive about the carrier's prospects this year, despite hurting from high oil prices, and will seek compensation from plane-maker Airbus for losses incurred after grounding some of its A380 superjumbos on wing-crack concerns.

The world's largest carrier of international traffic posted a sharp 72% drop in net profit for the fiscal year ending March 31 as fuel costs rose 44%.

But Sheikh Ahmed bin Saeed Al Maktoum told Zawya Dow Jones via telephone that he "is keeping a positive outlook" for this year's profits, while adding that the airline is yet to decide on its hedging strategy.

"We haven't taken a decision yet on hedging against higher fuel prices," the chairman said. The carrier meanwhile has increased its ticket prices since March to compensate for oil price hikes.

Airlines globally have suffered due to high oil prices with European carriers such as Air France-KLM and Deutsche Lufthansa blaming high fuel costs for their weak first-quarter results.

Besides "bearing the brunt of the crippling cost of fuel", the Dubai-based airline--the largest customer for A380s--earlier this month said profit was also dented after it grounded some of the superjumbos due to the discovery of wing cracks.

In March, Emirates had to temporarily ground its 21 superjumbos for check-up and repair, with an Airbus spokesperson saying at the time that the company will incur the cost of repairs.

"We are pushing Airbus to deliver the aircraft on time and in a good condition to fly. We will ask for compensation.. .It is our right to ask for compensation," Sheikh Ahmed said.

Emirates is currently "in discussion" with Airbus to come up with a solution to the problem, and the timing of the delivery, he added.

-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com; Twitter: @ZDJnews

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

23-05-12 0745GMT