An Emirates flight taxis at the Dubai International Airport in Dubai. Dubai Airports said Wednesday July 6, 2011 that a $7.8bn (Dh28.8bn) airport and airspace expansion plan for Dubai International Airport has been endorsed by Shaikh Mohammad Bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai. Image Credit: AP

Dubai: Emirates Group, which runs the biggest Arab carrier Emirates Airline, on Wednesday reported a 248 per cent growth in profit reaching $1.1 billion for the 2009-2010 financial year ending March 31, 2010 up from $325 million in 2008-09, bucking the worldwide trend marred by low yields and losses.

Emirates Airline itself recorded an unprecedented 415.7 per cent increase in net profits reaching $964 million, compared to $187 million reported in 2008-09 financial year.

The airline carried 20.8 per cent more passengers last year, reaching 27.5 million, up from 22.7 million reported in 2008-09, generating revenues of $11.8 billion, which is roughly the same as the previous year.

Although group revenue increased marginally by 0.4 per cent from $12.3 billion to $12.4 billion, the Dubai Government-owned organisation managed to secure such high net profits by cutting costs drastically and managing yields, officials said.

“Cost cutting has been the main driver,” Shaikh Ahmad Bin Saeed Al Maktoum, chairman and Chief Executive of Emirates Airline and Group, told a media briefing announcing the results.

“During this difficult times, we froze recruitment and some of our colleagues took unpaid leaves. Across the board, we managed to improve productivity,” he said, attributing the success to his fellow colleagues.

A fall in aviation jet fuel also has contributed to the results.

“During the year, we managed to save costs by 16 per cent, with a combination of lower fuel costs and cost cutting,” Tim Clark, president of Emirates Airline told Gulf News on the sidelines of the conference, attended by local and international media.

The good news is, Emirates has started recruitment. This year, it will hire 5,000 more people to its current staff strength of 49,950, of which 36,652 work for Emirates and 13,298 for its airport, ground handling and ticketing arm, Dnata.

Emirates, established by Dubai Government in 1985 with just $10 million, remained profitable in all but one year in its 24 year of operation. This is the airline’s 22nd year of consecutive profits. The airline currently has a fleet of 145 aircraft serving 102 destinations across 62 countries.

At the end of the year, the airline’s cash balance remains strong at $3.4 billion, enough to fund its current financial obligations. It has an orderbook backlog of more than 150 aircraft, worth $48 billion.

Cashflow

In response to a Gulf News query, Shaikh Ahmad said he is comfortable with the cashflow, and might not require any immediate funding requirement, bond or sukuks.

“This year, we are going to receive eight new aircraft and bankers are queueing to lend us. A good number of our aircraft are finance by banks, so we are comfortable with the current cashflow.”

Joining alliances

Going forward, he said, his airline doesn’t need to join any alliances. “We are doing wel without any airline alliances. So, I do not see any reason to join any alliances,” he said.

IPO

He also reiterated his stand on going public, saying it is up to the airline’s shareholder, the Government of Dubai.

“We are ready [for an initial public offering]. However, it is up to the Government of Dubai to decide when,” he said.

Acquisition

Tim Clark also ruled out acquisition of any international airline. “Our policy is to grow organically and we do not intend to acquire any carriers,” he told Gulf News.