Emirates airline posts Dh1.7b profit
Easing of US dollar against major currencies helped profitability — Ahmad
Emirates airline’s net profits more than doubled to Dh1.7 billion in the first half of the current financial year ended September 30, 2017, driven by the weakness in the US dollar against other major currencies.
The carrier said in a statement yesterday that its revenues in the first half of 2017 reached Dh44.5 billion, up 6 per cent year-on-year.
“The easing of the strong US dollar against other major currencies helped our profitability. We are also seeing the benefit of various incentives across the company to enhance our capability and efficiency with new technologies and new ways of working,” said Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group.
Emirates Group said its profits jumped 77 per cent year-on-year in the first half to Dh2.3 billion as revenues increased 6 per cent yearon-year to Dh49.4 billion.
E mirates will “continue to keep a careful eye on costs,” even as it plans to invest in its business and grow over the coming years, a top executive from the airline said. as its profits more than doubled year-onyear.
“Moving forward, we will continue to keep a careful eye on costs while investing to grow our business and provide our customers with world-class products and services. Our margins continue to face strong downward pressure from increased competition, oil prices have risen and we still face weak economic and uncertain political realities in many parts of the world,” said Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and CEO of Emirates airline and Group.
His comments came in a statement yesterday as Emirates reported its financial results for the first half of the 2017-2018 financial year ended September 30, 2017.
The airline’s profits saw a sharp 111 per cent jump to Dh1.7 billion compared to Dh786 million in the first half of last year. Revenues increased 6 per cent to Dh44.5 billion from Dh41.9 billion from the earlier year period. The airline carried 29.2 million passengers in the first
half (between April 1 and September 30), up 4 per cent over the same period last year.
Emirates Group, meanwhile, saw net profit rising by 77 per cent in the period, to Dh2.3 billion,
as revenues rose 6 per cent to Dh46.5 billion in the first half of 2017. The group said this rebound in profitability came despite “continuing downward pressure on margins, a rise in oil prices, and other challenges for the airline and travel industry.”
Outlook and challenges
Analysts also agreed with Shaikh Ahmad’s views on the airline’s outlook, which remains marred by challenges.
“I think the year and the industry environment are still quite challenging. We’ve got a backdrop of numerous geopolitical uncertainties around the globe that all airlines have to navigate. We’ve also seen fuel prices starting to rise, so if an airline is passive in that environment, it’s only going to one way, which is deep in the red,” said John Strickland, aviation expert and director of air transport consultancy JLS Consulting.
He pointed out, however, that Emirates has taken action earlier this year to cut capacity on certain US routes and elsewhere as a result of lower demand. Less visibly, the airline is restructuring internally to raise efficiency, Strickland said, adding that Emirates is a well-established company, and a well-respected brand, with a modern fleet.
“We await this weekend (at the Dubai Air Show) and see whether there’s news of further fleet renewal, potentially to include orders for a more efficient version of the A380, but the [outlook] is certainly [for] continued investment in stateof-the-art aircraft, which offer better unit operating costs and allow maximum network flexibility,” he said.
In its statement yesterday, Emirates said its operating costs grew 4 per cent, as fuel costs were 14 per cent higher year-on-year. This was largely due to an increase in oil prices as well as an increase in fuel volumes due to Emirates’ expanding fleet.
Fuel remained the largest component of the airline’s costs, accounting for 26 per cent of operating costs, Emirates said.