BUS_190509-EMIRATES-(Read-Only)
Emirates aircraft at Dubai International Airport. Revenues for the group rose by 7 per cent year-on-year to Dh109.3 billion. Image Credit: WAM

Dubai: Emirates Airline’s profits reached Dh871 million for the year ending 31 March, 2019.

The carrier said on Thursday it is “well-positioned to navigate speed bumps” in the year ahead even as it reported a plunge in its profits for 2018 in what it described as a “tough” year.

The airline’s net profits were down 69 per cent over a year earlier on the back of higher fuel costs, currency challenges, and “strong competitive pressure.” The decline in profits came even as revenues for Emirates inched higher by 6 per cent year-on-year to reach Dh97.9 billion.

58.6m

Number of passengers carried by Emirates

The number of passengers carried by the Dubai-based airline in the year was almost steady, at 58.6 million.

“Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities,” said Shaikh Ahmad Bin Saeed Al Maktoum, president of Dubai Civil Aviation and Chairman and Chief Executive of Emirates airline and Group.

“Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets. 2018-2019 has been tough, and our performance was not as strong as we would have liked.”

The airline said in its financial report that the strength in the US dollar against currencies in many of its key markets had a Dh572 million negative impact to the bottom line — compared to a positive impact of Dh661 million in the previous year.

Emirates also saw its biggest-ever fuel bill, which jumped by 25 per cent year-on-year to Dh30.8 billion. Fuel, as a result, accounted for 32 per cent of operating costs, remaining the biggest cost component for the carrier.

25%

Rise in Emirates’ fuel bill during the year to Dh30.8b

Meanwhile, for Emirates Group — under which the airline operates — profits for the year were also hit, falling by 44 per cent to Dh2.3 billion. The group announced a dividend of Dh500 million to the Investment Corporation of Dubai.

Revenues for the group rose by 7 per cent year-on-year to Dh109.3 billion.

“The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates,” Shaikh Ahmad said in a statement, adding that it was hard to predict the year ahead.

During the year, the group invested a total of Dh14.6 billion in new aircraft and equipment, acquisition of companies, and into technology — up from the Dh9 billion in investment spend a year earlier.

For dnata, the air services provider operating under the Emirates Group umbrella, the business saw its most profitable year, with Dh1.4 billion in profits — mainly due to gains from a one-time transaction in which it divested stakes in a travel company.

Without that divestment, dnata’s profits were lower 15 per cent year-on-year, even as revenues rose by 10 per cent to Dh14.4 billion.