Meh: Emirates Reports Half Year Financial Results

Talking of low salaries, the bulk of Dubai's workforce comes from India and Pakistan, the economic conditions in those countries are so bad that 90% of people live in slums and most eat only one meal a day. So when they come to the Gulf, even sharing a room with other workers is a jump in living conditions for them. The typical South Asian worker can easily survive on 300 dirhams a month, and he will send the rest home, allowing his family a life of luxury. Let's not forget that cost of living in South Asia is so low that even a baggage handler in Dubai can live more lavishly than a doctor in India

Back to your original question, Ben: True or fake? Emirates publishes its annual financial statements in accordance with IFRS and also publishes the (clean) audit opinion wich is based on ISA. It can therefore be assumed that the statements present a true and fair view, un the sense they are complete and apply generally recognized principles e.g. for measurement of revenue and cost. The half year result, however, is NOT an audited and standard based financial report. So in theory, it could be tweaked. But this is rather unlikely since it would have to be “tweaked back” at year end. Whether salaries are high or low is obviously not a matter of accounting standards. Also the big three US carriers pay some of their staff really low wages .... and do not disclose them in their financial reports ...

Nicola is right. Maybe salaries are not the best but you have to remember that in places like India or Pakistan, where most of workers in Dubai come from, 90% of people live in slums or eat one meal a day. Living in a dorm room sharing with 6 others is a 5 star luxury for them. As is eating 3 meals a day. As for salaries, a 3rd world worker can easily survive on 300 dirhams a month. If they get 10,000, that leaves 9,700 dhs to send back home. And given that India is so cheap, the family of a cleaner in Dubai lives like an emperor in India, enjoying luxurious lifestyle. Yes, it shocks first world sensibilities, but Dubai, and the Gulf has s system that works. The Arabs and Europeans are rich, Filipinos are the middle class, while India, Pakistanis are the worker class. You will not find any rich Indian in Dubai, nor you will you find a poor Arab. That is the way it is, and the system works, as can be seen by Arab airlines being the best in the world.

@ Azamaraal You make some good points. I think all of the gulf states — even Saudi Arabia — have a growing awareness that the hydrocarbons won’t last forever and that they need to start now in building sustainable economies. From my travels, Qatar strikes me as the most future-focussed: to them the 2020 World Cup is not an end in itself, but a hard date which signals a new beginning. The abolition earlier this year of most advance visa requirements was a very strong signal: Qatar is now the most open country in the Gulf. Having been one of the more conservative, it’s now openly proclaiming that everyone will be welcome during the World Cup — unmarried couples, gays, and Israeli passport holders. No other Gulf state has gone that far. And none has anything like Al Jazeera. While many of them have been trying to build world class museums (notably the Louvre Dubai), Qatar also has a rather staggering new National Library, which is a rather potent symbol of a different approach. And it has permanent campuses occupied by some of the western world’s leading universities — NorthWestern, Cornell, Texas A&M, UCL among others. The west has taken hundreds of years to transition from feudal states to modern liberal democracies. The Gulf transformation is being attempted in a staggeringly shorter period (and obviously still is a work in progress). In that context, Emirates, Etihad and Qatar are potent tools designed to position themselves centrally in the wider world, and to act as a Trojan Horse to bring people to their countries (it’s no accident that most offer generous “free” stopover stays when you transit through their home hubs). And what we see as a few billions in losses, they see as an investment in the future.

I think the real question is the strategy of the UAE in terms of long term growth and the economy. Obviously when the oil is depleted the UAE must find other sustainable means of funding the country. Dubai has no direct oil revenues and has been through a few major ups and downs financially. Notably the huge loan from Abu Dhabi in response to re-naming the Burg Dubai into the Burg Khalifa. When you consider that most of the eggs are in the tourism basket (and the second home market) it makes sense that transporting the clientele at a reasonable cost is a major keystone to the puzzle. So to encourage the growth perhaps the fact that EK shows even a minimal (1.8%) profit is deemed acceptable or even better than acceptable given the losses incurred by the other ME carriers. I'm not totally convinced by other bloggers who claim that salaries at EK are at the low end of the scale compared with the US. In this day and age with the huge expansion of China airlines and elsewhere (even Westjet says they need 350 pilots next year) the front seat of most EK flights is still filled and the accents indicate they are expats. Possibly cabin crew are less favorably compensated however I know of Canadians who are crew and find it much better that other employers they have worked with. Time will tell. Are we entering a period of economic slowdown that will wreak havoc in the Middle East and especially EK?