Financial Risks of Emirates Airline

    Financial Risks of a company indicate that risk that is posed to it in terms of finances. This is a hard risk and as it is hard, there are chances that the situation and the potential would get out of hand. This risk includes the breakeven factor, Yield, seat factor and load factor.

    It can be seen that the passenger seat factor indicates that percentage of seat that is occupied in terms of its capacity. It can be seen that there is considerable risk and it is also seen that the risk factor highlights that the seat factor has fallen considerably in the years, 2009 and 2017. It is now recovering from that loss. The lowest through in this chard is in 2017. It seems that year 2017 was particularly troublesome.

    This is the load factor in an overall perspective. It indicates the percentage loaded. This is quite fluctuating and illustrates that the load is volatile. It shifts up and down along with the load percentage and there is a negative trend attached to it as well. In an overall trend there is a horizontal movement across the chart and as this movement continues there is a high probability that it would continue this way in the future.

    The breakeven load factor is increasing, indicating that there is a rise in variable and fixed costs. It also indicates that in terms of percentage there is more sales required to attain breakeven quantity. It can be said that there was a setback between the years 2017 and 2018, which lowered this margin, though it was good for the company, but the costs reduced drastically and it is an important point explore.

        Yield does show fluctuation, but the fluctuations are little as compared to the overall trend as in an overall perspective the graph is horizontal. There is a trend that illustrates the potential increase in the yield curve at first. This happened till 2009 after 2009 there was a sharp fall in the yield curve, the curve shows yield recovered in 2011. The years that followed shows a consistent yield curve and since it was consistent, there was a stability in the organization till 2015. The yield curve then fell again in till 2017 and has recently began retracing its steps and increasing the yield curve slightly.

        In short the company has faced a lot of financial risk and as it can be seen that the capacity of the company is volatile, moreover the company illustrates that it is in the recovery phase as almost all measures turned bad in 2017-18. And now the results are showing change. This is positive and a step back into the recovery. There is a tendency of recovery so the company is doing well in an overall context of financial risks.

References of Emirates Airline