Dubai: Emirates, the biggest Arab carrier, continued to buck the global trend by undertaking cost-cutting measures and efficient management that helped the airline to post a 165 per cent jump in net profits to Dh752 million ($205 million), for the first six months of its current financial year ending September 30, up from Dh284 million ($77 million) in the same period of 2008.
Revenues of the airline, which entered its 25th year last month, declined 13.5 per cent to Dh19.8 billion ($5.4 billion) compared with Dh22.9 billion ($6.2 billion) recorded last year, due to lower passenger and cargo yields.
However, this failed to dent profitability as it managed to reduce costs by 15.8 per cent to Dh19.0 billion ($5.2 billion) from Dh22.6 billion ($6.1 billion) last year — "helped by cost containment measures and lower jet fuel prices," the airline said in a statement.
The increased profits came mostly from 18 per cent capacity growth by adding eight new aircraft to the fleet that has grown to 139, and two new destinations, at a time when the global aviation industry is poised to lose Dh41 billion this year.
"The airline made an estimated direct contribution of Dh10 billion, and an estimated indirect contribution of Dh14 billion to the UAE economy, carrying over 13 million passengers and over 700,000 tonnes of cargo, and in the process also helped other businesses operating at Dubai International Airport achieve growth in revenue and traffic," the statement said.
Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates airline and Group, said: "Emirates remained focused on its long-term strategy despite the global economic slowdown. We have continued to invest in our eco-efficient aircraft fleet; in strengthening our global route network, and also in supporting the infrastructure for our growing business.
"The months since the global meltdown have really tested our mettle. Unlike others in the industry, Emirates did not cut back on its product, service or people. Instead, we invested in these areas and looked to our people to develop ever more innovative ways to manage costs, improve efficiencies, reallocate resources, and drive alternative strategies for the business. Emirates' latest half-year performance testifies to the airline's strong business foundations and agility in adapting to the challenging global economic environment."
Capacity measured in available seat kilometres (ASKM), grew by 22 per cent, whilst passenger traffic carried measured in revenue passenger kilometres (RPKM) was up 21 per cent with the passenger seat factor sustained at a high level, averaging 77.5 per cent, slightly down compared to 78.3 per cent for last year. The volume of cargo uplifted was in line with last year.
"In a difficult economic situation like this, airlines need to adjust cost structure and remain profitability," Robert Ziegler, Vice President at AT Kearney, told Gulf News.
"Emirates has managed to do just that. It speaks very well for Emirates as they have managed to cut costs despite declining revenue."
Emirates' cash position (including held to maturity cash investments of Dh200 million) on September 30 was Dh6.7 billion ($1.8 billion), compared to Dh7.4 billion six months earlier. During the first half, Emirates successfully raised aircraft financing of Dh3.3 billion.
"While some say the green shoots of economy recovery are sprouting, we expect it will take at least another year or two before demand for air transport and travel services starts picking up again. In the meantime, Emirates is well-placed to weather the rest of the storm. We will continue to chart our course with long-term goals in mind while staying flexible to maximise opportunities and mitigate risks," Shaikh Ahmad said.