Fuel costs clip Emirates' wings
Emirates Airline today revealed a 72.1 per cent fall in annual profits, blaming “the stifling cost of jet fuel.”
The airline's earnings slid to Dhs1.5 billion ($409 million) from the record Dhs5.95 billion ($1.5billion) it made the previous year.
The challenging conditions faced by the carrier were reflected in the results of the broader Emirates Group – whose Dhs2.3 billion ($629 million) profit for the 12 months up to March 31 was 61 per cent lower than the Dhs5.95 billion ($1.6 billion) it made the previous year.
The firm was keen to stress there was a positive side to its latest results, with travel agent Dnata recording its best every profits, and the group itself clocking up its 24th consecutive year of profits.
Indeed, despite what the firm called “fundamental challenges” Emirates Group’s revenues over the last 12-months reached a records high, climbing to Dhs67.4 billion ($18. 4 billion) – up 17.8 per cent on the results announced this time last year.
The extra revenues, however, are being swallowed up by record fuel costs and other expenses.
“Managing volatile exchange rates, coupled with our highest ever fuel bill has required immense tenacity. Retaining growth and remaining profitable in these challenging economic times shows our profoundunderstanding of the markets that we do business in,” added Emirates chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum.
In a statement, the firm saidEmirates’ fuel bill increased by 44.4 per cent over the last year to reach Dhs24.3 billion ($6.6 billion). With operating costs increasing by 24 per cent compared to revenues that increased of 16.2 per cent over the same period, the carrier said it “bore the brunt of the crippling cost of fuel for nearly one year, before reluctantly introducing a fuel surcharge on all tickets”.
The airline carried a record 34 million passengers, an increase of 8 per cent, and logged a Passenger Seat Factor - the airline equivalent of hotel occupancy rates – of 80 per cent – in line with last year’s results.
The Group’s travel agent Dnata achieved the best results in its 52-year history, with its profits hitting Dhs808 million ($220 million).