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Emirates Group nets Dh2.2 billion in six months

Emirates Group, which operates the world’s largest airline in terms of international traffic, reported on Tuesday a four per cent surge in net profit and 13 per cent jump in revenues in the first half to underscore the carrier’s “robust performance” despite continued global economic pressure and high fuel prices.

Net profits hit Dh2.2 billion while revenues soared to Dh42.3 billion in the first half of the current fiscal year ending September 30, 2013, Emirates Group said in a statement.

The group’s flagship Emirates airline, which is currently among the fastest growing carriers in the world, carried 21.5 million passengers, up 15 per cent, and added 10 new aircraft, boosting capacity by 16 per cent during this period.

The airline, which is on trajectory to fly 70 million passengers in 2020, has been defying a general downturn in global aviation with vibrant growth over the past several years. In the first half, the airline could maintain seat load factor steady at 79.2 per cent, and return Dh1.7 billion in net profit to the group.

The group’s cash position on September 30 was at Dh18.2 billion, compared to Dh27 billion as on March 31. “This is after a Dh1.8 billion bond repayment which matured in July 2013, a Dh367 million first installment payment on a $1 billion Sukuk, and a Dh7 billion injection back into the business to fund the purchase of new aircraft, engines, spares and other projects across the group,” said the statement.

“The global business environment continues to be challenging. We have stayed agile even as we grow, and this ability to adapt and act quickly has been key to our success,” said Shaikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group.

Shaikh Ahmed said investments in the infrastructure of both Emirates and dnata would continue to pay off. While we keep a close watch on managing our immediate business targets, we never lose sight of our long-term goals, and that is why we continue to invest to build the business,” said Shaikh Ahmed.

In the past six months, the group continued to invest in and expand its employee base, increasing its overall staff count by 11.7 per cent to over 75,800 compared with March 31.

Saj Ahmad, chief analyst at London-based StrategicAero Research, told Khaleej Times that Emirates’ increase in first-half profits by $475 million shows that despite fuel cost headwinds, the airline carries more passengers and making a healthy profit that many airlines can only aspire to achieve.

“The huge rise in passengers translating into 16.1 per cent rise in revenue passenger kilometres underscores the strength of Emirates’ reach despite the fact that nearly 40 per cent of its costs were related to fuel,” he said.

Emirates, which is expected to place record aircraft orders at the Dubai Air Show opening on November 17, boosted its network by launching services to two new destinations — Haneda and Stockholm, bringing the total count of new routes launched in the past 12 months to seven, including Adelaide, Lyon, Phuket, Warsaw and Algiers.

During the first six months of the fiscal year, the Dubai-based carrier received 10 wide-body aircraft — six A380s, three 777s and one 777 freighter, with 15 more new aircraft scheduled to be delivered before March 31, 2014.

“Despite the fundamental challenges of high fuel prices, a still-recovering global economy, and a strong performance of the US dollar against other major currencies impacting revenues, Emirates continues to make a profit. In the first half of the 2013-14 fiscal year, Emirates net profit is Dh1.7 billion, up two per cent from the same period last year,” the statement said.

“Our capacity and route growth continue to match and meet passenger demand. High fuel prices, accounting for 39 per cent of our expenditures, and the unfavourable currency exchange environment continue to eat into our profits. However, we remain steadfast in our vision to be the airline of choice for international air services, and we will invest in our people and our infrastructure, and work closely with our partners to bring this to fruition,” said Shaikh Ahmed.

The airline, operating the world’s largest fleet of A380s and the largest fleet of Boeing 777s, now flies to 137 destinations in 77 countries, up from 126 cities last year in 74 countries. Additional new routes to be added in the remaining part of the fiscal year include Kabul, Kiev, Taipei and Boston.

In sharp contrast to the current trend seen across the aviation industry, Emirates posted strong business growth, both in terms of capacity on offer and traffic carried. Capacity grew by 16.9 per cent, passenger traffic was up 16.1 per cent. The volume of cargo uplifted was up by 5.2 per cent, a remarkable growth and performance against the market trend.

The airline’s revenue, including other operating income, of Dh39.8 billion was higher by 12 per cent, reflecting passenger demand and strong yield.

issacjohn@khaleejtimes.com