Soaring oil prices dragged down profits for Emirates Airline last year as they added an extra US$1.6 billion (Dh5.87bn) to the carrier's fuel bill.
The Dubai carrier experienced a 72 per cent decline in profits in the last financial year.
Emirates, the world's biggest airline measured by international passenger miles travelled, achieved a profit of Dh1.5bn in the 12 months ending on March 31, compared to a record Dh5.37bn in the previous financial year.
"Our most significant challenge was the high price of jet fuel, which has remained uncharacteristically above $100 per barrel since February 2011," Emirates said.
"As a result, fuel costs now represent 40 per cent of our total costs, which means we spent an additional $1.6bn over the last financial year, which directly impacts our bottom line." The proportion of jet fuel costs to total operating cost is at an all-time high for the airline, it said. Jet fuel spend for the carrier increased by 44.4 per cent last year over the previous year.
Revenue for Emirates reached a record level of Dh62.3bn in the last financial year, an increase of 14.9 per cent over the previous year.
The carrier last year added 22 aircraft to its fleet and expanded its route network by 11 destinations. The passenger seat factor remained steady at 80 per cent despite a challenging environment.
"The economic environment was hampered by the ongoing euro-zone debt crisis and a slowly rebounding global economy," Emirates said.
"Other major challenges included sustained geopolitical turmoil in Africa and the Middle East and several natural disasters."
Analysts said Emirates fared relatively well considering the circumstances. "Fuel prices for the industry as a whole have dented earnings for pretty much every single airline, be it full service or low cost," said Saj Ahmad, the chief analyst at StrategicAero Research.
"That said, to have weathered the fuel cost storm, where costs rose by a sharp 44 per cent, Emirates still managed to produce not just a 24th consecutive year of profits, but a $409m profit figure, is far beyond the reach of many of its global competitors.
"Emirates has by far and away done a lot better than many would have expected given the challenging industry landscape and the ongoing uncertainty of fuel prices and continued regional political instability."
The International Air Travel Association (Iata) has described oil prices as a "toxic risk" to the aviation industry.
In March, it downgraded its forecast for the sector to a global profit of $3bn this year, citing high oil prices. This was a $500m downgrade from its December forecast.
"We have not seen such sustained high oil prices previously," Tony Tyler, Iata's director general and chief executive said last week.
"Jet fuel prices have risen 8 per cent since January. Considering fuel now accounts for 34 per cent of average operating costs, it's an increase that hurts."
Emirates Group as a whole, which includes its air services division Dnata, reported net profit of Dh2.3bn, 61 per cent less than the last financial year.
"Had fuel prices remained the same as last year, our annual net profit would have again soared to a new record high," the group said.
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