Dubai: Emirates Group said on Wednesday the Dubai International runway closure was “the biggest hit” to its bottom line as it reported a muted half-year net-profit performance.
The parent company of the Middle East’s largest airline recorded a 1.1 per cent increase in half year profits to Dh2.2 billion for the six month’s ending September 30, compared to a year earlier.
Group revenues were Dh47.5 billion for the first six months of the company’s 2014-2015 fiscal year, a 12.3 per cent increase.
Emirates airline reduced flights on 41 routes over an 80-days period from May to July as Dubai International cut operations to a single runway for upgrade work. Some airlines shifted select operations to nearby airports while others elected to temporarily axe services.
Despite the capacity constraining runway closure, Emirates airlines profits increased 8 per cent to Dh1.9 billion in the six months to September 30.
“Emirates [airline] profits have certainly been impacted by the need to ground significant capacity while the runway work at Dubai was undertaken … it is encouraging that profits are still up,” said John Strickland, director of UK-based JLS Consulting, by email.
The drop in operations at Dubai International impacted Emirates Group’s travel and airport ground handling services subsidiary dnata, which is responsible for ground handling services at Dubai International.
Dnata’s profit dropped 26 per cent to Dh339 million in the first six months of the state-owned Group’s fiscal year. However, revenue rose 22.2 per cent to Dh4.6 billion.
Cash assets across the Group fell 15.3 to Dh16.1 billion in the six month period compared to a year ago.