Emi­rates air­line prof­its down 83 per cent in past year

Cape Breton Post - - Classifieds/ Business -

Emi­rates, the Mid­dle East’s largest air­line, said Thurs­day its prof­its fell by more than 80 per cent to $340 mil­lion last year as it grap­pled with a slump in de­mand linked to a range of head­winds, from po­lit­i­cal up­heaval and ter­ror­ism in Europe to tougher travel re­stric­tions to the U.S.

Emi­rates Group, which op­er­ates the air­line, said over­all prof­its for the com­pany were down 70 per cent to $670 mil­lion.

In its earn­ings re­port, the com­pany said prof­its were af­fected by height­ened im­mi­gra­tion con­cerns, ter­ror at­tacks in sev­eral Euro­pean cities, such as Lon­don and Paris, an at­tempted mil­i­tary coup in Turkey and un­cer­tainty caused by Britain’s vote to leave the Euro­pean Union. It also cited a strong U.S. dol­lar against cur­ren­cies in ma­jor mar­kets.

Specif­i­cally, the air­line’s prof­its dipped to 1.25 bil­lion dirhams ($340 mil­lion) com­pared to 7.13 bil­lion dirhams ($1.9 bil­lion) the year be­fore. Its earn­ings re­port cov­ers the pe­riod of April 2016 through the end of March 2017.

In April, the Dubai-based car­rier be­gan slash­ing 20 per cent of its 126 weekly flights to the U.S. be­cause of a drop in de­mand caused by tougher U.S. se­cu­rity mea­sures and Trump ad­min­is­tra­tion at­tempts to ban trav­ellers from some Mus­lim-ma­jor­ity na­tions.

The com­pany said in its earn­ings re­port that one of the big­gest chal­lenges it faced came as a re­sult of ac­tions taken by the U.S. gov­ern­ment to heighten se­cu­rity vet­ting of trav­ellers and re­strict cer­tain elec­tronic de­vices, in­clud­ing lap­tops, in air­craft cab­ins. Dubai was one of 10 cities in Mus­lim-ma­jor­ity coun­tries af­fected by a ban on lap­tops and other per­sonal elec­tron­ics in carry-on lug­gage aboard U.S. bound flights.

The air­line said this had a di­rect im­pact on con­sumer de­mand for air travel into the U.S., one of the air­line’s big­gest growth po­ten­tial mar­kets. To re­spond to the ban on elec­tronic de­vices in the cabin, the air­line said it quickly in­tro­duced con­sumer-friendly ser­vices such as com­pli­men­tary lap­top loans on flights to the U.S.

Air­line an­a­lyst John Strick­land of JLS Con­sult­ing said he ex­pects the air­line will keep a tighter rein on its ca­pac­ity growth in the short to medium term, but that the com­pany’s more than 30year his­tory proves it can with­stand nu­mer­ous shocks.

“It has demon­strated re­cently its will­ing­ness to act com­mer­cially and take tough de­ci­sions with re­gards to its re­cent an­nounce­ment of U.S. flight ca­pac­ity cuts,’’ Strick­land said.

De­spite a drop in prof­its, Emi­rates Group, which in­cludes the Dnata ground and travel ser­vices provider, said rev­enue in­creased slightly to around $26 bil­lion from $25.3 bil­lion. The com­pany’s prof­its had climbed to $2.2 bil­lion the pre­vi­ous fis­cal year.

Emi­rates car­ried some 56 mil­lion pas­sen­gers in 2016-2017 com­pared to 52 mil­lion pas­sen­gers the pre­vi­ous year.

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