Emirates, dnata profits: How Dubai aviation group stayed in the black despite war, soaring fuel costs

Dubai: Emirates airline and dnata have managed to remain profitable through one of the most challenging periods for regional aviation, relying on resilient passenger demand, a strong cargo business, fuel-price hedging and international operations to cushion the impact of the US-Iran conflict, which began on February 28.

The Emirates Group, on Thursday, reported a profit before tax of Dh4.1 billion for the six months to September 30, 2026, despite intermittent airspace restrictions, flight disruptions and a sharp increase in fuel costs.

While that is a 66 per cent decline from the same period last year, when the Group recorded a record performance, it means both Emirates airline and its airport services subsidiary dnata remained in the black.

The numbers, however, reveal the scale of the pressure. Group revenue fell 12 per cent to Dh66.2 billion, from Dh75.4 billion a year earlier. Profit after tax dropped to Dh3.6 billion, also 66 per cent lower.

So how did Dubai's aviation group manage to stay profitable when airlines and travel businesses across the region were dealing with disrupted operations, reduced capacity and higher operating costs?

The answer lies in a combination of cargo earnings, financial protection against fuel-price increases, operational adjustments and dnata's international business.

One of the biggest contributors to Emirates' performance was its cargo division, SkyCargo.

While passenger operations were affected by airspace restrictions and a reduced flying schedule, cargo proved more resilient. Emirates transported 1.2 million tonnes of cargo during the first half of 2026-27, just 1 per cent less than the same period last year. But cargo revenue increased by 52 per cent.

The regional conflict reduced available airfreight capacity, while disruptions to maritime transport encouraged some shippers to look for alternatives by air. This helped Emirates capture additional cargo business even as passenger operations remained under pressure.

The airline also expanded its cargo network and capacity during the period.

It added five Boeing 777 freighters and deployed its first passenger-to-freighter converted aircraft. Its freighter network gained two destinations – Almaty and Zhengzhou – while dedicated freighter services were introduced to more than 15 existing Emirates destinations.

The airline also increased frequencies to several important markets, including in the Far East.

This was significant because cargo provided an additional revenue stream at a time when passenger numbers and available seat capacity were falling.

Fuel was another major challenge, but Emirates had a financial mechanism that helped soften the blow.

Global jet fuel prices doubled compared with the same six-month period last year, according to the Group. Although Emirates reduced its fuel uplift by 12 per cent because it operated fewer flights, its fuel costs before hedging gains increased by 60 per cent.

Fuel accounted for 34 per cent of the airline's operating costs, making it its single largest expense. However, gains of Dh7.1 billion from its fuel-price risk management strategy significantly offset the increase.

These gains reduced the net increase in fuel costs to 13 per cent.

The airline's operating costs, including fuel, fell by 2 per cent overall, broadly reflecting its reduced operations.

The airline's financial performance also needs to be viewed against a significant reduction in flying activity.

Intermittent airspace restrictions and closures across the region, alongside government travel advisories, affected consumer choices and travel flows during the first half of the financial year.

Emirates responded by reducing its flying schedule and gradually restoring its network through Dubai.

By September 30, the airline was operating 91 per cent of its pre-disruption network, connecting 150 airports across 78 countries and territories.

However, the reduction in capacity was reflected in its passenger numbers.

The passenger seat factor measures how much of an airline's available seating capacity is occupied by paying passengers. Its decline from 79.5 per cent to 72 per cent indicates that Emirates was carrying fewer passengers relative to the seats it had available.

Despite these pressures, Emirates said customer demand held firm across its markets, particularly for premium cabins.

The airline also introduced measures to encourage travellers to book with greater confidence, including travel insurance cover not restricted by government travel advisories, free date changes on booked tickets and generous refund policies.

While Emirates relied heavily on cargo and fuel-price protection, dnata benefited from the geographical spread of its international operations.

The aviation services company, which handles ground services, cargo, catering, retail and travel operations, reported revenue of Dh11 billion for the first half, down 7 per cent. Its profit before tax fell 51 per cent to Dh410 million.

The decline reflected reduced volumes in some of its UAE and UK businesses. However, its international operations helped offset weaker airline and travel activity in the UAE and the wider Gulf region.

dnata's airport operations remained its biggest revenue contributor, generating Dh5.4 billion, down 3 per cent.

The company handled 414,012 aircraft turns, an 8 per cent decline, and 1.49 million tonnes of cargo, down 6 per cent.

Its catering and retail division generated Dh4.2 billion, up 1 per cent, supported by growth in inflight retail, particularly with easyJet and Aer Lingus.

However, the number of airline meals uplifted fell 10 per cent to 54 million, largely because of the loss of key contracts in its UK operations.

The travel division was the weakest performer. Revenue fell 31 per cent to Dh1.4 billion, partly because of the divestment of Travel Republic and Netflights in the UK. Both businesses stopped accepting new bookings in November 2025.

The underlying total transactional value of dnata's travel division also fell 22 per cent to Dh3.8 billion.

Its international business nevertheless provided some protection against the decline in activity at its UAE hub.

Rather than put its expansion plans on hold during the disruption, dnata continued investing in its international network and infrastructure.

During the first half, the company:

In Dubai, dnata also opened an integrated command centre to support its growing cargo operations.

These investments are intended to strengthen its global operating capacity and reduce reliance on activity in any single market.

Emirates also continued spending on its fleet, aircraft interiors and passenger experience, despite the difficult operating environment.

The airline received nine new Airbus A350 aircraft and completed cabin refurbishments on 12 aircraft – nine A380s and three Boeing 777s.

Its wider retrofit programme represents a planned investment of more than $7 billion to bring its latest cabin products across the fleet.

The airline also expanded its Starlink installation programme. A further 36 aircraft received high-speed Wi-Fi during the first half, taking the total number of Starlink-equipped aircraft to 57 by September 30.

Other developments included:

Emirates also broke ground in May on a $5.1 billion engineering and maintenance, repair and overhaul facility at Al Maktoum International Airport. Completion is expected in the mid-2030s.

Emirates Group Chairman and Chief Executive Sheikh Ahmed bin Saeed Al Maktoum credited the UAE government with helping restore aviation operations following military activity across the Gulf.

"It has been a demanding six months, and once again our business model and our people stood up to the test," he said.

He added that customer demand had remained firm and cargo operations had made a strong contribution, keeping revenue and cash levels healthy despite the increase in fuel costs.

Sheikh Ahmed also thanked the UAE government for its response and coordination with aviation stakeholders.

"The government's measures have also led to the easing of travel advisories to and through the UAE. This has allowed us to restore our operations with confidence and to keep serving our customers and communities," he said.

Another important factor was the Group's ability to draw on its financial reserves.

Emirates Group ended September 30 with cash of Dh54.1 billion, compared with Dh59.6 billion at the end of March.

The company said it had used its cash reserves to support business requirements, including pre-delivery payments for aircraft and existing debt obligations.

It also paid the remaining Dh2 billion dividend to its owner, the Investment Corporation of Dubai, from the Dh3.5 billion declared for the 2025-26 financial year.

The Group's cash position gives it room to continue funding operations and investments while dealing with uncertainty in the regional aviation market.

The Group enters the second half of its 2026-27 financial year with a lower profit base than last year, but it remains profitable and has continued investing in its future capacity.

Sheikh Ahmed said the company would maintain a close watch on costs and geopolitical developments.

"We enter the second half of our 2026-27 financial year with measured optimism," he said.

"We've weathered challenges before, and with our strong cash position and solid foundation built up over the years, the Group is well-placed to navigate the headwinds of volatility and high fuel prices."

The figures also show that the recovery is far from complete. Emirates is still operating below its pre-disruption network, passenger traffic remains lower and dnata continues to feel the effects of reduced activity in some of its key markets.

The Group's employee base also fell by 2 per cent to 128,237 at the end of September, although both Emirates and dnata said recruitment drives were continuing.