• Home
• /
• Local business

Emirates Net Nosedives 80.4pc

DUBAI — Emirates Airline, one of the Middle East’s biggest carrierss, said its full-year profit plunged by 80.4 per cent, reflecting record oil price jumps in 2008 that bloated costs, and the impact of the worldwide recession on the global airline industry.

The airline though is unfazed by thinning passenger volume this year and said it will continue to expand its fleet. The company had planned on acquiring 18 new additional aircraft this year.

In 2008-2009, the airline’s passenger fleet totaled 132 aircraft. By the end of 2009, the Emirates’ order book, excluding options, will be for 161 aircraft worth approximately $ 52 billion.

“We will progress with our fleet and route expansion plans. With our strong business fundamentals and track record, we have had no problems securing financing for our growth. In fact, to date we have already secured financial commitments for over half of our aircraft deliveries in the coming year,” Shaikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates and Emirates Group said in a statement.

Emirates’ net income for the financial year 2008-2009 which ended on March 31, dropped to Dh982 million ($268 million) compared to the previous year’s record profit of Dh5.0 billion ($1.37 billion). The airline’s revenue rose by 9.9 per cent to Dh44.2 billion ($12 billion) from Dh40.2 billion ($10.95 billion) in the previous year.

Emirates Group, Emirates’ parent company, posted a 72 per cent drop in net income at Dh 1.49 billion ($ 406 million) compared to the previous year’s profit of Dh5.3 billion ($1.45 billion). Revenue of the Emirates Group went up by 10.4 per cent from the year before to Dh46.3 billion ($ 12.6 billion).

Another unit of the Emirates Group, ground handling service company Dnata, posted a net profit of Dh507 million ($138 million), a 66.4 per cent increase from a year earlier.

Dnata’s revenue, which includes earnings from its units, Dnata International, Dnata Cargo and Dnata Travel Services, climbed by 22 per cent to Dh3.25 billion ($886 million), compared with Dh2.67 billion ($727 million) in the previous year.

The Emirates Group’s earnings were severely hit by escalating oil prices in the first six months of 2009 which peaked at $147 a barrel. Fuel costs was the Group’s biggest expenditure, accounting for an unprecedented 36.2 per cent of airline operating costs compared with 32.9 per cent in the previous year.

Last March, the International Air Transport Association, or IATA, forecast global airlines losses to reach $4.7 billion in 2009, significantly worse than IATA’s December forecast for a $2.5 billion loss, reflecting the rapid deterioration of the global 
economic conditions.

IATA said demand is projected to fall sharply with passenger traffic expected to contract by 5.7 per cent over the year. It said revenue implications of this fall will be exaggerated by an even sharper fall in premium traffic. Cargo demand is expected to decline by 13 per cent. 
— rocel@khaleejtimes.com