As far as profit goes, Emirates seems to be the airline that can do no wrong.
The Dubai-based carrier has just declared its second-highest profit ever: AED 5.5 billion (USD 1.5 billion). It’s the 27th year in which Emirates has made a profit – and international business now accounts for over 60% of revenue.
A media statement noted that the company had notched up steady growth, “ending the year in a strong position despite the many global and operational challenges during this period”.
The financial year ending 31 March 2015 also marked the achievement of new capacity milestones at both Emirates and dnata, as the Group continued to expand its global footprint, and strengthen its business through strategic investments.
In its 2014-15 Annual Report, the Emirates Group posted an AED 5.5 billion (USD 1.5 billion) profit, up 34% from last year. The Group’s revenue reached AED 96.5 billion (USD 26.3 billion), an increase of 10% over last year’s results, and the group’s cash balance remained strong, growing to AED 20.0 billion (USD 5.5 billion).
“2014-15 was a turbulent year for aviation,” said His Highness (H.H.) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.
“The fall in oil prices provided cost relief in the second half of our financial year, however it did not offset the hit to our profitability caused by significant currency fluctuations, nor the hit to our revenue from operational adjustments in addressing the Ebola outbreak, armed conflicts in several regions, and the 80-day runway upgrading works at Dubai International airport (DXB).
“Achieving our 27th consecutive year of profit and one of our best performances to date, is testimony to the strength of our brands and business fundamentals, as well as the dedication and talent of our workforce.”
The strong rise of the US dollar against currencies in many of Emirates’ and dnata’s key markets had an AED 1.5 billion (USD 412 million) impact to the Group’s bottom line, while the 80-day disruption at DXB had an estimated impact of AED 1.7 billion (USD 467 million) on Group revenue, the company said.
In 2014-15, the Emriates Group collectively invested over AED 20.2 billion (USD 5.5 billion) in new aircraft and equipment, modern facilities, the latest technologies, and staff initiatives. This was the second highest amount ever in one financial year after last year’s record investment.
The group’s employee base across its more than 80 subsidiaries and companies increased by 11% to over 84,000-strong representing over 160 different nationalities.
Sheikh Ahmed mentioned “the looming threat of protectionism in some countries”, an allusion to lobbying by three large US carriers for an end to the Open Skies agreement.
“Looking ahead, the ongoing uncertainty for many currencies and economic markets around the world will continue to pose a challenge, as will the looming threat of protectionism in some countries. However, we move into the new financial year with confidence, and a strong foundation for continued profitability with our strong balance sheet, solid track record, diverse global portfolio, and international talent pool.
“We will continue on our journey of steady and rational growth, and work even harder to meet and exceed our customers’ expectations.”
Emirates received 24 new aircraft during the year, including 12 A380s, 10 Boeing 777-300ERs and two Boeing 777Fs, bringing its total fleet count to 231. At the same time 10 aircraft were phased out, taking the average fleet age to 75 months or approximately half the industry average of 140 months.
The airline remains the world’s largest operator of the B777 and A380 – both aircraft being amongst the most modern and efficient wide-bodied jets available.
In line with the overall profit increase, the Emirates Group declared a dividend of AED 2.6 billion (USD 700 million) to the Investment Corporation of Dubai.
Edited by Peter Needham