Business | Aviation
Emirates profits to be hit after spending extra Dh1.8bn on fuel
Emirates Airline spent Dh1.8 billion more on fuel than it had budgeted during the first half of its financial year and that will affect its financial performance for the full-year ending March 31.
- By Shakir Husain, Staff Reporter
- Published: 16:39 October 9, 2008
- Image Credit: Gulf News Archive
- Emirates will announce its half-year results in the middle of next month.
Dubai: Emirates Airline spent Dh1.8 billion more on fuel than it had budgeted during the first half of its financial year and that will affect its financial performance for the full-year ending March 31.
The airline posted a 62 per cent increase in profit to Dh5 billion in 2007-08 and was expecting a similar profit for 2008-09.
Emirates had budgeted fuel at $101 per barrel, but the price reached $145 during the early part of its financial year, and stayed above $120 per barrel for the later months.
"We did not believe that prices would go as high as they did and hold (at those levels) as long as they did," the airline's president Tim Clark told reporters touring Dubai International Airport's new Terminal 3, which is for exclusive use by Emirates.
The airline will announce its half-year results in the middle of next month.
"They are better than we thought given the terrible problem we had with the fuel price in the first half of the year," Clark said.
The high fuel cost will hit the company's bottom line by Dh1.8 billion, he added.
The projected seat factor in the next two months could fall by up to two per cent due to weak travel demand amid a worsening global economy.
However, with oil prices falling, Emirates is hoping for a bounce with increased bookings in the coming months.
Clark said the ongoing labour unrest at Boeing will also hit Emirates' deliveries.
"The Boeing strike has given us some difficulties. We are facing delays. There is no sign of the resolution of the strike at the moment so its longevity is anybody's guess. The longer it goes on, the more difficult it is for us in terms of growing our network," he said.
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