x Abu Dhabi, UAEWednesday 26 July 2017

Dubai's Emirates Airline sees profits soar 52% to set record

The global economic recovery last year helped Emirates reach record net profits of $1.5bn, although high fuel prices dampened the performance.

The Dubai Government is set for a Dh2.3 billion windfall from Emirates Airline as the carrier increased its shareholder dividend more than twofold after revealing record profits yesterday.

Emirates, which has surpassed Lufthansa to become the world's biggest international airline, enjoyed bumper passenger numbers as profits soared 52 per cent to US$1.5bn (Dh5.5bn) in the 12 months to March 31.

In the process the carrier overcame regional unrest, high fuel prices and natural disasters such as ash clouds, earthquakes and tsunamis, although these events did pull the airline back from an expected profit of $2bn.

"By virtually every measure, our results far surpassed all previous highs," said Sheikh Ahmed bin Saeed Al Maktoum, the chairman and chief executive of Emirates.

With 151 wide-bodied jets, the airline has one of the world's largest long-haul fleets and has an additional 193 aircraft on order from Airbus and Boeing worth tens of billions of dollars.

"Looking ahead we have no plans to deviate from our proven strategy," Sheikh Ahmed said.

Worldwide, airlines last year enjoyed an increase in passenger numbers and robust earnings as the global economy recovered, with the industry earning profits of $16bn, according to the International Air Transport Association (IATA).

This year, high fuel prices are expected to lower global airline profits to $8.6bn, the IATA forecasts, suggesting Emirates will be hard pressed to repeat its latest results.

The carrier's dividend increased from the Dh956 million it paid the Dubai Government last year, and comes as the emirate works to put its finances on a sound footing after the global downturn.

Executives attributed the airline's profits on it reaching its highest seat occupancy levels, with Emirates flights operating on average 80 per cent full, more than 4 per cent higher than the Middle East average.

The airline's unequalled success, marking its 23rd year of consecutive profits, is often attributed to the UAE's low operating costs and its status as an ideal location for a global airline.

"Geographically, Dubai continues to be the strategic centre point of a widening network that puts 75 per cent of the world's population within an eight-hour flight or less," the company said.

In addition, Emirates owns 25 non-airline subsidiaries in retail, hospitality and services that contributed nearly 10 per cent of its profits.

The carrier's expansion has put it in the cross hairs of European airlines that view its growth as a threat to their existence, and yesterday's profits announcement may add further fuel to their arguments for protection.

Emirates officials yesterday reiterated their belief in open competition and liberalised aviation markets.

"Emirates continues to dismiss the perceived limitations of the aviation industry and advocates for an open-skies environment that stimulates competition, an undeniable positive for the customer," Sheikh Ahmed said.

The carrier's SkyCargo division also reported robust results in transporting freight from Asia to Europe, Africa and the Middle East.

The division's revenues rose 27.6 per cent to $2.4bn after carrying 1.8 million tonnes of freight, a rise of 11.8 per cent from the previous year.

The airline's sister company, the ground-handling and ticketing provider Dnata, also posted strong growth as revenues climbed 39 per cent to $1.2bn.

Profits decreased by 8.6 per cent per cent to $152m, however, because of costs associated with recent acquisitions. The company is the world's fourth-largest air-services provider.