Dubai: Emirates Group, which last week announced Dh4.2 billion ($1.1 billion) net profits for year ending March 31, 2010, will pay Dh1.6 billion, or more than a third of its profits, to its shareholder, the Dubai Government.
"Emirates has declared a dividend of Dh1.6 billion [$424 million] to its parent, the Investment Corporation of Dubai, a wholly owned Government of Dubai entity," the airline said in a statement.
This is the highest dividend to be paid to the Dubai Government by Emirates, the most powerful Arab brand, which was established with a mere $10 million start-up capital in 1985 with two aircraft.
Emirates' strong financial results come at a time when the global financial crisis is taking a heavy toll on the aviation and tourism industry.
Last year, airlines lost $9.4 billion, while Emirates quadrupled its profits by cutting costs amid falling yields and backed by lower jet fuel prices.
"Against a background of the worst global recession in generations, large-scale economic uncertainty and unforgiving markets, the Emirates Group faced arguably its sternest test," Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group, said.
"We came through these difficult times with flying colours."
The results also demonstrate a strong and sustainable business model pursued by the airline — which directly and indirectly contributes roughly a fourth to Dubai's economy.
"With this, Emirates' leadership, especially Shaikh Ahmad, has proven that companies could make money even in difficult situations," a Dubai-based financial analyst said.
"Although aviation assets are not as strong as real estate and other assets, Emirates' recent success proves otherwise."
Shaikh Ahmad last year was named the chairman of a fiscal committee to restructure the government's financial burden.
"With Emirates, he has the best credentials to help Dubai navigate out of the situation," he said, requesting anonymity.
Emirates results also come at a time when one of the Dubai Government's biggest subsidiaries, Dubai World, is negotiating with creditors to restructure its debts.