Emirates’ 6-month revenues increase 10% to Dh48.9b

Yesterday, the Dubai-based carrier reported an 86 per cent drop in its net profit for the first half of 2018 on the back of higher oil prices and currency fluctuations, and warned of a “tough” year.

Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group, said that higher fuel costs and currency devaluations in markets including India, Brazil, Angola, and Iran wiped around Dh4.6 billion from the group’s profits.

Emirates Group, the parent company of the airline that also operates dnata, reported a 53 per cent decline in its net profit for the first six months of 2018, to Dh1.1 billion from Dh2.3 billion in the same period of 2017.

The group said in a statement the profit erosion was “primarily due to the significant increase in fuel prices of 37 per cent compared to the same period last year, as well as the negative impact of currencies in certain markets.”

The group’s revenues reached Dh54.4 billion, up 10 per cent from the Dh49.4 billion recorded in the same six months of 2017.

“The next six months will be tough, but the Emirates Group’s foundations remain strong,” Shaikh Ahmad said.

‘Myriad challenges’

During the first half of the year, Emirates Group axed 1,380 employees, it said, reducing its staff count by 1 per cent to 101,983. It attributed that to “natural attrition, together with a slower pace of recruitment.”

“We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields and uncertain economic and political realities in our region and in other parts of the world,” Shaikh Ahmad said.

“We are keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes.”

Emirates airline’s total operating costs grew by 13 per cent, with fuel costs 42 per cent higher year-on-year in the first half of 2018. The rise in fuel costs came as oil prices rose 37 per cent and as Emirates used 4 per cent more fuel on its expanding fleet of aircraft.

The airline said fuel remained the largest component of its costs, accounting for 33 per cent of operating costs.

On a group level, Emirates Group’s cash position fell to Dh21.5 billion at the end of September 2018, compared to Dh25.4 billion at the end of March 2018.

As for dnata, the airport services provider, its profits in the first half jumped by 31 per cent to Dh861 million on the back of gains from a one-time transaction as it divested a stake in travel management company Hogg Robinson Group.

Without this transaction, dnata’s profits are down 18 per cent year-on-year, Emirates Group said.