Emirates airline has reported an impressive 65% surge in net profit for the first half of the financial year to USD 849 million, helped by lower fuel costs and healthy growth in passenger numbers.
The Dubai-based airline, commercial partner of Qantas and largest carrier in the Middle East, said fuel prices fell 41% in a year and passenger numbers climbed 10% to 25.7 million in the six-month period ending 30 September 2015.
Salient points in the latest result are:
- Group: Profit up 65% to USD 1 billion on revenue of USD 12.6 billion. The airline said the result was negatively impacted by the strong US dollar
- Emirates: Continued profitability and growth with 25.7 million passengers carried (up 10%); fleet expanded by nine new aircraft (14% increase in capacity).
- Dnata (Emirates’ ground handling, travel, cargo and flight catering arm): Double-digit revenue and profit growth driven by first time consolidation of major international acquisitions Stella Group and Toll dnata.
Emirates performance is being closely monitored by rivals, including the ‘Big Three’ US carriers. American Airlines, United Airlines and Delta Air Lines allege that Emirates and other Gulf carriers are receiving government subsidies. The Gulf carriers deny the claims.
In the most recent half-year, Emirates group revenue reached USD 12.6 billion for the first six months of its 2015-16 financial year, down 2.3% from USD 12.9 billion during the same period last year, reflecting the impact of the strong US dollar against major currencies.
The Emirates group marked one of its best half-year profit performances ever, with net profit rising to USD 1 billion, up 65% over the last year’s results. The group’s cash position on 30 September 2015 stood at USD 4 billion, compared to USD 5.5 billion as at 31 March 2015.
“This is due to ongoing investments mainly into new aircraft, airline related infrastructure projects, and business acquisitions,” the airline stated.
Chairman and chief executive of Emirates Airline and Group, His Highness Sheikh Ahmed bin Saeed Al Maktoum, 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.
“However, we made a calculated decision not to hedge our fuel purchases, which paid off as fuel prices continued to soften. Emirates also made the decision to pass on savings from the lower fuel prices to our customers by cutting passenger fuel surcharges, and lowering fares across the network.”
He added: “That the Group is reporting one of its most profitable first half-year performances ever, speaks to the strength of our underlying business. In first six months of this year, Emirates and dnata grew in terms of capacity, capability and global reach – organically, and for dnata through strategic acquisitions as well.
“Looking ahead, we will continue to build on our core strengths by investing in new ways to improve efficiencies and deliver the best customer outcomes. At the same time, we will keep an eye out for strategic growth opportunities, and stay agile so that we can respond effectively to external challenges.”
In the past six months, the group continued to develop and expand its employee base, increasing its overall staff count by 4% to over 87,000 compared with 31 March 2015.
During the first six months of the financial year Emirates received 13 wide-body aircraft – 8 A380s, and 5 Boeing 777s. It also retired 4 older aircraft, resulting in a net increase of nine new aircraft for its fleet, with 16 more new aircraft scheduled to be delivered before the end of the financial year (31 March 2016).
Emirates also expanded its global route network by launching services to four new destinations – Bali, Multan, Orlando, and Mashhad. As of 30 September 2015, Emirates’ global network spanned 147 destinations in 79 countries. Bologna came online on 3rd November, and Panama City will be launched on 1st February 2016.
Operating the world’s largest fleet of A380s and the largest fleet of Boeing 777s, Emirates continues to provide ever better connections for its customers across the globe with just one stop in Dubai.
Capacity measured in Available Seat Kilometres (ASKM), grew by 16%, while passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) grew 11% with average Passenger Seat Factor dropping slightly to 78.3%, compared with last year’s 81.5%.
Emirates carried 25.7 million passengers between 1 April and 30 September 2015, up 10% from the same period last year. The volume of cargo uplifted was up by 10% to reach 1.25 million tonnes, “a solid performance that continues to buck the market trend”, the airline pointed out.
Emirates revenue, including other operating income, of USD 11.5 billion was slightly down by 4% compared with USD 12 billion) recorded last year.
The airline’s explanation: “This is due to the combined effect of an unfavourable currency environment – where the US dollar strengthened significantly against most other major currencies; and lower average fares reflecting the airline’s decision to pass on some of its fuel cost savings to customers.”
Edited by Peter Needham