Rising fuel costs cast a drag on Emirates’ earnings performance

The Dubai airline carried 21.5 million passengers during the period, up 15 per cent from last year, while cargo volumes grew 5.2 per cent.

Emirates Airline reported net profits of Dh1.7bn year on year. Stan Honda / AFP Photo

Rising fuel costs were a drag on profit growth at Emirates Airline in its financial first half despite rising passenger and cargo numbers.

The results come just days ahead of the Dubai Airshow, where the carrier is expected to announce a bumper order of new planes.

The Emirates Group reported net profits of Dh2.2 billion for the six months to the end of September, a year-on-year rise of 4 per cent.

Of this figure, the airline’s profit stood at Dh1.7bn, up 2 per cent from last year.

Group revenues grew 13 per cent to Dh42.3bn during this period.

They were affected by high fuel costs (39 per cent of expenses), a still-recovering global economy, and the US dollar’s strong performance against other major currencies.

However, those challenges were largely offset by Emirates’ growing global passenger and cargo traffic – contrary to the downturn across the worldwide aviation industry.

The airline carried 21.5 million passengers during the period, up 15 per cent from last year, while cargo volumes grew 5.2 per cent.

Its revenue grew 12 per cent to Dh39.8bn, including other operating revenue.

“The global business environment continues to be challenging,” said Sheikh Ahmed bin Saeed Al Maktoum, the chairman and chief executive of Emirates Airline and Emirates Group. “We have stayed agile even as we grow, and this ability to adapt and act quickly has been key to our success.”

The group’s cash hoard stood at Dh18.2bn at the end of September, down from Dh27bn at the end of March.

This follows a Dh1.8bn bond repayment which matured in July, a Dh367 million first instalment payment on a US$1bn sukuk, and a Dh7bn injection to fund new aircraft, engines, spare parts and other projects across the group.

During the six-month period, Emirates took delivery of 10 wide-body aircraft consisting of A380s, three 777s and a 777 freighter.

It is scheduled to receive 15 more aircraft by the end of next March.

The airline celebrated five years of its A380 service during the period, having flown more than 18 million passengers since its maiden flight on August 1, 2008, from Dubai to New York.

The airline flies to 137 destinations in 77 countries, up from 126 cities in 74 countries a year ago.

Revenue at dnata, the group’s airline services unit, grew to Dh3.7bn for the six-month period, up 18 per cent from last year. Profit increased 13 per cent to Dh458m.