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A Thai reality check

28 November 2015

Andrew Marshall (the other one who still works at Reuters) made some interesting, and alarming notes on Thailand in his recent blog.

"Thailand is rightly proud of its frequent appearances on lists of the world’s best islands, cities, restaurants and spas. These attest to the country’s enduring appeal to millions of foreign tourists, even as a military junta tightens its grip on power. But a slew of less flattering statistics says much more about the health of Thailand’s society and the ability of its leaders to improve it. For example:

Road deaths – Thailand has the world’s second highest rate (after lawless Libya), with at least 14,000 deaths in 2012. The World Health Organization says the actual number could be more than 24,000.

Plastic pollution – Thailand is one of five countries responsible for most of the eight million tons of plastic dumped in the world’s oceans.

Teenage pregnancy – Thailand has the second highest rate (after impoverished Laos) in East Asia and the Pacific, and it’s rising rapidly.

Human trafficking – Thailand occupies the lowest tier (with North Korea and Syria) in the U.S. State Department’s annual ranking of countries for their efforts to combat human trafficking.

Black economy – Thailand is seventh on a list of top ten developing countries for illicit capital outflows, third if you re-plot the data as a percentage of GDP. These outflows totalled $35 billion in 2012.

Gun crime – Amazingly, Thailand’s gun homicide rate is almost equal to that of the United States."

The land of smiles is of course marketing speak. Thailand is far from the idyllic picture. What is remarkable is how its tourist appeal endures, despite the number of foreigner deaths, assaults and incidents.

Still better than Thaksin?

27 November 2015 : Prasit Wongtibun for New Mandala

As the latest corruption scandal shows, the Thai junta hasn’t rid the country of dodgy politicians; it’s simply taken their place.

Anti-corruption has been a poster child of anti-democratic groups in Thailand since 2005.

The People’s Alliance for Democracy (2005-2008), the Council for National Security (2006-2007), the People’s Democratic Reform Council (2013-2014), and the National Council of Peace and Order (2014–present) have all used it to drive their agenda.

Now, as the Thai economy crumbles and dissent grows, an anti-corruption campaign is the only lifeline for the ruling NCPO. Supposedly, it confirms the junta’s superior moral standard when compared to elected politicians.

Since the May 2014 coup, the NCPO has adopted harsh measures to eradicate corruption, and General Prayuth Chan-ocha, NCPO head, constantly repeats his intention to fight against dishonesty in public office.

Unsurprisingly, the main target of the NCPO’s anti-corruption campaign has been former Prime Minister Yingluck Shinawatra.

After being overthrown by a constitutional court ruling before the coup, Yingluck was retroactively impeached by the junta-appointed National Legislative Assembly (NLA) in August for suspicion of corruption in a rice-subsidy scheme she oversaw as PM. The scheme operated at a loss and cost the state several million baht.

A criminal case against her was filed with the Supreme Court, and she now faces a possible 10 years in jail. For civil compensation, the NCPO avoided a lengthy judicial process by commissioning an ad hoc tribunal under the Government Tort Act. Under this, a large part of Yingluck’s assets could be confiscated – an outcome that could cripple the future political ambitions of both her, and her brother Thaksin Shinawatra.

But the NCPO’s anti-corruption campaign has gone further than holding Yingluck to account.

After coming to power, Prayuth was given instant impunity from section 44 of the Interim Constitution, allowing him to overrule any law and regulation at his will. In addition, the NCPO, upon receiving a list of suspected civil servants and local officials from the National Anti-Corruption Commission (NACC), invoked its dictatorial power to immediately remove or suspend these suspects from active posts.

Furthermore, the NLA amended the anti-corruption law, adding the death penalty to the charge. The upcoming constitution will probably contain more chapters on public morals as well as severe punishment for unethical politicians.

These aggressive measures appeal to the junta’s supporters who believe that such powers will quickly rid the country of corrupt politicians.

They might reluctantly admit that Prayuth’s personality is rogue and erratic. That the NCPO’s policies might resemble the Thaksinomics once so widely derided. That people’s rights and liberties are almost absent. And that the country has been humiliated in the international arena.

But still, they insist, this is better than former PM Thaksin’s administration because Prayuth is rescuing Thailand from corruption.

Yet is Thailand becoming less corrupt? Has the NCPO’s aggressive campaign transformed Thailand into a country where the rule of law and transparency reign? The reality points to the opposite. The country is as corrupt as before, or even worse.

For example, the business sector has reported that “commissions” for government projects has risen to 30 or 50 per cent of the total project value. Local mafias on the street were replaced by men in uniform to whom vendors still pay protection.

The NCPO has also appointed their relatives to the administration. Prayuth’s brother was appointed into the NLA and the NCPO. National Reform Council members appointed their spouses and offspring as assistants.

Asset disclosure revealed unjustifiable wealth in many NLA members’ accounts. Prayuth’s cabinet was also accused of procuring extraordinarily expensive microphone sets that prompted public outcry.

Despite these allegations, the NCPO’s supporters argue that while corruption persists, it is of a smaller scale than before. They conclude that Thais have to tolerate the lesser evil to eliminate the greater one. Such pragmatism is in great contrast to the ultra-moralistic standard they applied to previous cabinets.

Such claims are naďve for two reasons.

First, corruption within the Thai army is not at all small. Fraud can be found at many levels. Officers enjoy bribes from Thai men who want to avoid compulsory conscription. Once within a barracks, officers can take a portion of conscripts’ salary. Later, these conscripts can be allocated to generals’ houses as servants, gardeners, and drivers.

The army has also triggered many multi-million baht scandals involving weapon and equipment procurements; armored vehicles, fighter jets, bomb detectors, even aerial surveillance balloons. This corruption is so systemised that people tend to forget that it exists.

Second, the solution to corruption is far more complicated than exercising authoritative power, punishing the accused and hoping that this brutality intimidates others.

Corruption thrives in Thailand because its culture suits the practice so well that a few transfers or even imprisonments will never correct the ill practice.

Thailand is known for its deference to seniority, its hierarchical social structure, and face-saving, all of which allows corruption to flourish. No one offends the powerful senior by accusing him of wrongful conduct, even when it is obvious. Whistle-blowers are often condemned for causing shame to an organisation.

In order to change these attitudes, Thailand needs to instill a sense of equality and openness. Dissent must be encouraged. Misconduct should be reported without fear of revenge. Unfortunately, the junta could never offer such values, for it is one of the most hierarchical and opaque institutions in Thailand.

Section 44 is not the magic tool many expect it to be. Corruption is the symptom of a deficit in the rule of law, particularly when people cheat the system for personal gain. In this light, the NCPO’s exercise of section 44 deepens the culture of cheating, confirming for the public that the end justifies the means.

Since corruption is ingrained within society, any anti-corruption campaign has to plan for a long-term and systematic operation. Consistency and fairness are two important keys.

But Prayuth’s attention span is short. Prosecution has been sporadic. Moreover, his anti-corruption campaign has only seemed to hit only the Shinwatra family while many other cases involving the NCPO’s allies remain untouched.

By not acting even-handedly, the public has seen Prayuth’s anti-corruption campaign for what it really is; rhetoric to harass his personal enemies.

This unfair approach will not teach people to stop being corrupt; it simply encourages them to choose the right side of politics, so they can continue to commit bad deeds.

In its supposed quest to rid Thailand of corruption, the NCPO’s biggest challenge has recently emerged.

In early November, the junta made high-profile arrests of a famous fortune-teller and two policemen for lese majeste. These arrests led to more warrants for army officers who fled the country and were later dismissed without honours.

The case continued with the mysterious deaths in detention of some of the accused. It also emerged that these men were involved in alleged corruption in the construction of Thailand’s newest major landmark, Rajabhakti Park.

Rajabhakti Park is located on the southwest coast of Thailand. It displays huge bronze statutes of seven great ancient Thai kings in order to commemorate their reigns and inspire loyalty to the current monarchy.

The park is the masterpiece of former Army Chief, Udomdej Sitabutr, who boasted about raising hundreds of millions of baht through donations and finishing the construction in only a few months.

But investigations have revealed that a large portion of the donations were diverted into people’s pockets. Sculptors admitted that they were paid much lower than the official price. Palm trees, quoted at 300,000 baht each, were actually donated for free.

The Rajabhakti Park scandal has caused serious damage for the NCPO. The scale of corruption is large with possibly hundreds of millions of baht embezzled. Moreover, it challenges the army’s notion of loyalty.

The army was caught benefitting illegally from the monarchy’s revered status, an act that brought disgrace to the palace. Finally, in addition to several mid-ranked officers, evidence ultimately pointed to Udomdej.

Although Udomdej retired in October, he is still an active member of the NCPO, and is deputy defence minister. He failed to clear himself of accusations of corruption when he gave an interview on the topic. He admitted that there was corruption but all money has since been returned as a donation to the project.

The army is not used to purging its own personnel. If it does, it will be in a kangaroo court, not through a normal judicial process. Usually, only a few low-ranked officers are held accountable; the big fish get away.

But the NCPO is now a political body in the public spotlight. The Rajabhakti Park case posed a dilemma for them. If the NCPO punished Udomdej, it would be breaking the long-held tradition of unity within the military and also upset the regime.

But if the NCPO spared him, it would not seem any better than former Prime Minister Thaksin Shinawatra, who was tainted with corruption, disloyalty, and favouritism. After a brief internal probe, the current Army Commander-in-Chief, Theerachai Nakvanich, announced that the commission found no corruption.

He then lost his temper when one female correspondent asked for a financial statement. He ranted that he could not understand why people wanted to punish those with good intentions. The lame press conference did more harm than good to the NCPO’s reputation. It made it seem they chose to cover up the crime of its cronies, just as any politician would have done.

The press continues to investigate the story and the National Anti-Corruption Commission have finally accepted the case. These latest developments prove how incompetent the army is in tackling corruption and how unrealistic the pragmatic hope of choosing the lesser evil over a supposed bigger evil is.

Meanwhile, the “still better than Thaksin” mantra, has lost much of its charm.

While the most ardent supporters of the NCPO insist that this scandal was Thaksin’s plan to sabotage the government, many finally woke up to reality and grieved that their sacrifice during the Bangkok Shutdown campaign of 2014 had been wasted.

But what can one do against a corrupt junta? No courts will try the case and the public cannot recall the previous government. Hopefully, Thais will learn that only a good ‘checks-and-balances’ system and a democratic culture can make Thailand transparent; not a benevolent dictator.

They should push for more democracy, not less. But at present, Thais can only wait for the NCPO’s mercy to step down.

Prasit Wongtibun is a pen name. The author is an observer of Thai politics and law.

Shooting down Russian fighter escalates ME tensions

25 November 2015

Turkish fighter jets shot down a Russian warplane near the Syrian border on Tuesday, the first time a NATO member's armed forces have downed a Russian or Soviet military aircraft since the 1950s, and an act Vladimir Putin said would have "significant consequences."

Turkey said the aircraft had violated its airspace and been warned 10 times in the space of five minutes before it was attacked.

In reality it appears that if the Russian fighter did enter Turkish airspace it did so for a matter of seconds. Though with border flights such as this there is a risk of conflict along the border.

Turkey has requested an extraordinary NATO meeting to inform members about the downing of the jet, which will take place at 5pm Brussels time (11:00am Eastern time).

Both Turkey and Russia have mobilised their pr teams to explain this incident.

Both pilots appear to have jettisoned from the SU-24 fighter-bomber but were apparently dead by the time their bodies were found. There are conflicting claims as to their fate.

In a very strongly-worded statement around 4pm Turkish time (8am ET), President Putin said the plane fell on Syrian territory four kilometers (2.5 miles) from Turkey.

"Neither our pilots nor our jet threatened the territory of Turkey. This is obvious," he said, speaking ahead of a visit by King Abdullah II of Jordan in Sochi. "We will analyze everything, and today's tragic event will have significant consequences, including for Russia-Turkish relations.

"Do they want to make Nato serve ISIS? I understand that every state has its own regional interests and we've always respected that, but we will never allow the kind of crime that happened to today to take place. And of course we hope that the international community will find the strength to come together and fight against the common evil."

Some media have alarming described this incident as the start of World War 3. That is unlikely. Putin will need to be seen to do something. There will be plenty sound and fury and probably some form of retribution, maybe economic. Banning Turkish flights from Russia may be a start.

Moscow has allowed its jets to test NATO borders regularly. It is a game as much as anything. But not this time. Turkey sees itself as a regional power, it also sees Moscow as a sometimes partner-of-convenience, but also local rival.

Putin’s immediate response has been to accuse Turkey of stabbing Russia in the back, of in effect protecting ISIS, and running to its NATO powers as if it has been one of its own aircraft that had been shot down.

But no one wants this to escalate beyond words and economic sanctions. Europe clearly wants Moscow to be part of the solution in Syria. And in Europe there is plenty of concern about an emboldened Turkey, its agenda and its role in the region.

Russia will want some form of apology from Turkey that can be spread widely through the Russian media. The Turkish PM will not want to climb down. But for now Russia has the upper hand in the pr war. This looks like an unnecessary act of aggression by the Turkish.

As one commentator noted: "Putin really wants a return to 19th century geopolitics, when might made right and realpolitik was all. Let’s not forget that one of the defining 19th century conflicts was that between Russia and the Ottoman Empire, which were sometimes openly at war, sometimes ostensibly at peace, but never anything than enemies. Here we go again."

The shaming of America

16 November 2015

Fox News (such an awful fear mongering organisation) reported last night that Florida Governor Rick Scott (no relation - thankfully) said that the state will not be willing to accept any refugees from Syria. Florida joins the growing list of states that have sent similar notices to the federal government.

More than half the nation's governors -- 26 states -- say they oppose letting Syrian refugees into their states, although the final say on this contentious immigration issue will fall to the federal government.

States protesting the admission of refugees range from Alabama and Georgia, to Texas and Arizona, to Michigan and Illinois, to Maine and New Hampshire. Among these 26 states, all but one have Republican governors.

The announcements came after authorities revealed that at least one of the suspects believed to be involved in the Paris terrorist attacks entered Europe among the current wave of Syrian refugees. He had falsely identified himself as a Syrian named Ahmad al Muhammad and was allowed to enter Greece in early October.

One alleged terrorist out of over 250,000 refugees who have fled in the last few months.

In joining a group of largely Republican governors opposing resettlement of Syrian refugees in their states, Gov. Rick Scott has said no to the Syrian refugees — and yes to fear — proving once again that terrorism works.

America - a land built on immigration; a land that has welcomed waves of immigrants; the Irish fleeing famine and British oppression; Europeans fleeing the devastation of two world wars; Chinese fleeing communism. And now candidates for the U.S. presidency, including former Gov. Jeb Bush, are seriously talking about abandoning such basic constitutional principles as separation between church and state, proposing that the United States help only Christian refugees?

America is frightened to the point of wanting to seal her borders, rejecting compassion.

An estimated 40,000 refugees fled Syria each day this fall. The United States has a very comprehensive and lengthy screening process for asylum-seekers from that war-torn country. Estimates are that it takes 18 months to three years to complete.

Pope Francis noted that: “Our world is facing a refugee crisis of a magnitude not seen since the Second World War,” he said during his historic address to Congress on Sept. 24. “Let us treat others with the same passion and compassion with which we want to be treated … In a word, if we want security, let us give security; if we want life, let us give life; if we want opportunities, let us provide opportunities.”

President Barack Obama recalled those words Monday during a news conference at the close of a two-day summit of Western leaders. “People who are fleeing Syria are the most harmed by terrorism. They are the most vulnerable as a consequence of civil war strife. They are parents. They are children. They are orphans. And it is very important … that we do not close our hearts to these victims of such violence,” he said.

One other small detail that Americans may want to recall - it was your nation’s invasion of Iraq that contributed to the instability in the Middle East.

“The land of the free and the home of the brave.” No more.

What the attacks in Paris say about Islamic State's intentions

15 November 2015 - The Economist

France has always been high on the list of rhetorical targets for Islamic State (IS). "Know that we want Paris—by Allah’s permission—before Rome and before Spain, after we blacken your lives and destroy the White House, the Big Ben and the Eiffel Tower," said Abu Muhammad al-Adnani, the top spokesman for IS. But that was the long-term plan, perhaps to be carried out by "our children and grandchildren", he added, back in March, long before the atrocities this weekend in the French capital.

In the short term, fighters were instead directed to travel to the group's main battleground in Iraq and Syria, where IS controls a swathe of land. Unlike al-Qaeda, which specialised in attacking the "far enemy" in America and Europe, IS focused on building and fighting for its “caliphate” in Iraq and Syria, and in acquiring affiliates elsewhere in the Middle East as states collapsed or frayed. Abu Bakr al-Baghdadi, the group's leader, was never part of the global jihad movement and indeed is thought not to have travelled outside Iraq and Syria.

But the carnage in Paris on November 13th and a recent spate of earlier attacks claimed by IS may indicate a change in strategy; these include two bombings in Beirut on November 12th and the explosion that brought down a Russian aeroplane in Egypt on October 31st (a bombing in Ankara that killed more than 100 people in Ankara on October 10th was attributed to IS but not claimed by it). Officials in America and Europe say the attackers in Paris communicated with the central leadership of IS in Syria prior to the attacks. Iraqi officials say their government passed on a warning about an imminent assault by the group on Western countries (some say it explicitly mentioned France). François Hollande, the French president, has declared that the massacre "was prepared, organised and planned from abroad". If the central leadership of IS directed the attacks it would represent an escalation for the group, which to this point has more often acted as the inspiration, rather than the instigator, of violence against Western targets. The question, then, is why?

To believe IS, the attacks are retribution for Western airstrikes against it in Iraq and Syria, where the group is under pressure. Kurdish Peshmerga fighters, with the help of those airstrikes, have retaken the town of Sinjar in north-west Iraq, threatening the supply lines between the group’s two main bastions, Raqqa in Syria and Mosul in Iraq. The Iraqi army has encircled IS-held Ramadi, west of Baghdad. And on November 12th a strike by an American drone probably killed Mohammed Emwazi, the IS executioner dubbed "Jihadi John".

For IS, spectacular attacks abroad may now seem like the most effective way of fighting back and deterring deeper involvement by outside forces, whether it be Russia's recent intervention in Syria or France's more longstanding engagement. The attacks on Western targets may also represent a form of armed propaganda. As IS is weakened at home, the group may be looking to save face and project strength in any way it can. If deterrence is the goal, however, it is likely to be counterproductive. Western governments are promising to step up their fight against IS. French warplanes have already struck IS militants in Syria in response to massacre in Paris.

Whatever the proximate cause of this apparent shift in strategy, it is perhaps best to think of it as a character trait that is finally manifesting itself. Although most of the group's rhetoric is aimed at local enemies in the Middle East, there have long been calls for conquest in the West by the group's leaders and in its publications. "You haven’t seen anything from us just yet," said Mr Adnani, referring to the West, at the beginning of the year. The fear is that as the group comes under more pressure at home, it may lash out even more regularly abroad, choosing the soft targets of Western cities to create the biggest headlines

Time to leave Dubai

15 November 2015

By 5am on Friday morning last week it was clear to me that it is time for Tai and I to leave Dubai.

The reasons are many - but they all add up to a place where I am not happy; where I dislike the person that I am when I am here - too angry, too frustrated, too intolerant.

Simply stated - if you do care about right or wrong; fair and unfair; doing good or doing bad; treating the people around you as you yourself would like to be treated; transparency and accountability; that people should have a role in how they are governed and by who; then Dubai will test your resilience.

You can give in to it as many do - if you cannot beat them then join them. Or at some stage you have to say enough is enough.

That's not to say that there are not good reasons for being here. For us it has worked well. We have made friends here that will outlive our time in Dubai. With Tai at Emirates we have been able to travel together and regularly; we have been able to keep in good contact with family.

But in some ways that is symptomatic: the best days have been the one's where we are not in Dubai.

So what is driving me away.

I do not even want to write that down - at least not until after we have left. Such is the level of paranoia among writers/bloggers/commentators here.

Perhaps the saddest part; it is not home and never will, or can, be.

Provoking hate through Paris attacks

14 November 2015

Overnight there were six separate terror attacks in Paris. The attacks were on people eating; listening to music; attending s sports event. They were attacks at the heart of western-style lives aimed at gaining maximum publicity.

The number of dead is now 128 while another 99 are in critical condition.

Gunmen systematically slaughtered at least 87 young people at a show by Eagles Of Death Metal

Others strapped with suicide bombs also attacked restaurants and a sports stadium at locations across the French capital.

The French president says Islamic State behind attacks, which are an "act of war."

It is not clear at this time whether this is definitely the work of IS but is is clear that the aims of the attack were to: terrorise (enemies of the terrorists), mobilise (supporters) and polarise (communities). The latter aim was laid out explicitly as goal by IS in February.

As with the Charlie Hedbo attack at the start of the year it may well be that the attacks unite the French and Europeans across all faiths rather than creating the polarization and hatred that they seek.

One of the lessons of being in America through the summer is how easy, and how wrong, it is to see all Muslims through the same lens. The reality is that "Islamic" means very different things even to different Muslims and that there is a crisis of values in Islam. The Islamist extremist worldview says that we're separate, different, hate each other and are eternal enemies.

But like all extremists they are in the small minority. If we want to shatter this extremist worldview then the right response is to show them we are not separate or different, we do not hate each and can be eternal friends.

Seeing Europeans line up to help and embrace Muslim refugees in the summer infuriated and shattered the worldview of so many Islamist extremists.

Whatever response Europe now chooses, it should not trade off short-term security (and popularity) for long-term strategic effectiveness.

The post 9-11 message is that a "war-on-terror" is not the right answer; the Bush response gave the extremists exactly what they wanted by empowering the very psychopaths that the USA went to war with.

The reality is that the open nature of world cities makes them open to Paris type attacks. It is very hard to stop suicidal terrorists who are on a one-way mission. Key responses needed are on personal level: defiance, toughness, vigilance.

And as one Arabic commentator wrote on Facebook: "Leave it to the Middle East to put an end to the Schengen agreement & the European dream of an "ever closer union". We now export Oil & Failure."

Dubai Airshow 2015 - a reality check

8 November 2015

The 2015 Dubai Airshow opened today.

This biennial event has previously been a showcase for glitzy orders and major annoucements.

Not this year. The opening day saw no major purchasing deals announced. And I doubt there will be mush activity later in the week.

But the Gulf airlines are using the event to showcase the latest and newest aircraft in their fast-growing fleets.

Dubai-based Emirates displayed its 68th brand new double decker A380 aircraft (in a two class 615 seat configuration), which was delivered directly from Airbus to the airshow site. Qatar Airways is displaying three of its aircraft, the A380, A350 and a Boeing 787 Dreamliner.

In the last airshow two years ago, deals worth more than $140 billion for new Boeing and Airbus planes were announced by the four main airlines in the region: Emirates, Etihad, Qatar Airways and budget carrier flydubai. Many of these orders are still being processed. Though at some stage Airbus amd Emirates will need to reach an accord on the A380neo and Emirates will also need to decide between the AirbusA350 and the Boeing 787 for its regionsl and less high density flights.

The Dubai Airshow is seen as an increasingly important barometer of the state of the aviation industry and the rising roles of the big-spending Gulf carriers as they compete for routes and critical stopover traffic between Asia, Europe and the Americas.

In Dubai alone, aviation contributes to 28 per cent of the emirate's gross domestic product, or about $22 billion. For a young generation of Gulf Arabs, the growing aviation industry also offers thousands of new jobs. In the Middle East, 40,000 pilots and 53,000 technicians will be needed in the next two decades to keep up with demand, according to a Boeing forecast.

The Dubai Airshow this year includes 1,100 exhibitors from around the world with 150 from the U.S. The flying display includes fighter jets such as the Rafale, Typhoon, F-16 and F-22 as well as the AirbusA350 and displays from Al Fursan, the Breitling wingwalkers and the Frecce Tricolori.

Reality - it was a low key opening day and attendance fell like it was lower than in previous years. The aed50 car park fee probably did not help; a car pick which also smelled and looked like it had been completed the previous day.

Emirates half year results show yields under pressure

7 November 2015
Emirates Results excluding DNATA in AED billions 6m to 30 Sept 2015 year on year change y/e 31
6m to
31 Mar 2015
6m to 30 Sept 2014 y/e 31
6m to 31 Mar
6m to 30 Sept
Revenue including other operating income 42.3 -4% 88.8 44.6 44.2 82.6 42.8 39.8
Profit Attributable to Owner 3.1 +63% 4.6 2.7 1.9 3.3 1.6 1.7
Fuel Costs 28.7 30.7
Staff Costs 11.9 10.2
Profit attributable to shareholder as % of revenue 7.3% 5.1 6.1% 4.3% 4.0% 3.7% 4.3%
Passengers flown 25.7 11.8% 49.3 26.5 23.0 44.5 23.0 21.5
Load factor 78.3 -3.9% 79.6 80.0 81.5 79.4% 79.2%
Total Group Revenue inc DNATA 46.1 -3% 96.5 49.0 47.5 87.8 45.5 42.3
Total Group profit inc DNATA attributable to owner 3.7 +68% 5.5 3.3 2.2 4.1 1.9 2.2
Group Profit Share Target 3.7 billion 4.255 billion
Profit Share 9 weeks Profit share target no achieved but nominal bonus of 3 weeks

The Emirates Group last Thursday announced that revenue reached AED46.1 billion ($12.6 billion) for the first six months of its 2015-16 financial year, down 2.3 percent from the same period last year, reflecting the impact of the strong US dollar against major currencies.

There are other distractions: widening regional wars and security concerns stopped services to a number of destinations, halting the Bamako launch, and rerouting flights over conflict zones. Cutthroat competition forced fares down. Even the distracting war of words with US airlines cost company time.

The Group, which comprises the international airline and air services provider dnata, said in a statement that it recorded one of its best half-year profit performances ever, with net profit rising to AED3.7 billion ($1 billion), up 65 percent over the year earlier result.

It added that its cash position on September 30 was at AED14.8 billion compared to AED20 billion six months earlier due to ongoing investments mainly into new aircraft, airline related infrastructure projects, and business acquisitions.

Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group, said: “Our top-line figures were hit hard by the strong US dollar against other major currencies. The currency exchange situation, combined with ongoing regional conflict and weak economic outlook in many parts of the world, dampened the positive impact of lower fuel prices during the first half of our 2015-16 financial year.

Emirates’ revenue decreased, just the second time in its first half year history, by 4% to Dhs42.3 billion. Passenger numbers increased by 10% to 25.7 million and capacity grew by 16%. Seat load factors dropped to 78.3% from 81.5%.

Emirates Airline's net profit for the six months was AED3.1 billion, up 65 percent from the same period last year, partly due to the impact of lower fuel prices.

On average, fuel prices were 41 percent lower compared to the same period last year. Fuel remained the largest component of the airline’s cost, accounting for 28 percent of operating costs compared with 38 percent in the first six months of last year.

Some Emirates’ milestones in the six months include: 13 new aircraft; four new destinations; upgraded services to 15 cities and frequency increases to 10; and the Emirates FA Cup and Benfica sponsorships.

In the six months Group employee strength grew by 4% to more than 87,000 – adding over 2,000 people in Emirates and 600 in dnata.

In the second six months of the financial year Emirates will take delivery of 16 more aircraft.

The real message in the numbers is that revenue is down to 2013/2014 levels; since there has been a significant increase in capacity in the last two years. Yields are under real pressure. The bottom line has been saved by the massive reduction in fuel costs.