Emirates net profit tumbles 86%

DUBAI (Reuters) – First-half profit at Emirates plunged to its lowest in a decade, hit by higher fuel costs and unfavorable currency moves, and the Gulf airline said it faced a tough six months ahead.

The Dubai-based carrier, which warned earlier this week that earnings were being squeezed, said on Thursday its net profit tumbled 86 percent to 226 million dirhams ($62 million) in the six months to Sept. 30. Revenue at the stateowned airline, one of the world's biggest international carriers, rose 10 percent to 48.9 billion dirhams.

Chairman Sheikh Ahmed bin Saeed al-Maktoum said higher fuel costs and currency devaluations in markets such as India, Brazil, Angola, and Iran cost the group 4.6 billion dirhams in profit, echoing recent warnings from other airlines.

"The next six months will be tough," he said in a statement.

First-half profit for Emirates Group, which also includes airport and travel services company dnata, fell 53 percent to 1.1 billion dirhams.

"We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields, and uncertain economic and political realities in our region and in other parts of the world," Sheikh Ahmed said.

Airline operating costs rose 13 percent with fuel costs on average up 42 percent, which Emirates said was largely due to higher oil prices rather than an increase in operations.

The number of passengers carried rose by 3 percent to 30.1 million, while the amount of cargo it carried declined 1 percent to 1.3 million tons.

The group's workforce shrank by around 1,400 employees, or 1 percent, which it said was largely due to natural attrition and a slower pace of recruitment.

The airline did not mention the impact of a pilot shortage which has forced it to cancel some flights this year. Reuters reported in May the airline was also facing a shortage of cabin crew, which Emirates denied.