Emirates sees profit slide 76% on fuel

Dubai’s flag carrier Emirates Airline reported a 76 percent slump in first half net profit to AED827m ($225m) as rising fuel costs and regional unrest squeezed margins. The largest international carrier saw net profit fall to AED827m from AED3.39bn in the year-earlier period, the airline said in a statement to Dubai bourse on Thursday. Revenue for the six months to Sept 30 reached AED30.3bn, a 15 percent rise on the AED26.4m generated in the same period a year earlier, the statement said. The carrier’s financial year runs April 1 to March 31. “Emirates remains focused on its long-term strategy despite global instability [and] ever-climbing fuel prices, which resulted in Emirates paying $1bn more in fuel costs over the same period last year and fluctuating exchange rates,” said chairman Sheikh Ahmed bin Saeed Al-Maktoum. The airline said currency translation differences resulted in a AED24m loss in the period compared to a AED24m gain last year. “The global challenges of the past six months have again put Emirates to the test,” said Sheikh Al Maktoum. The company will remain focused on its long-term strategy, he said. The largest buyer of the Airbus A380 superjumbo said its passenger seat factor, a key industry benchmark of profitability, was above 79 percent. Emirates said its cash position “remained strong” at AED13.8bn on 30 Sept, after settling capital outflows of more than AED4bn, primarily towards aircraft pre-delivery payments. The carrier took delivery of 10 new wide-body aircraft during the period, and added 3,400 staff. The Dubai government-owned airline has an order book valued at more than $66bn, to include around 199 planes scheduled for delivery through to 2019. Emirates counts 90 Airbus A380s worth $34bn at list price among its outstanding orders, and said in July it plans to spend around $4bn annually over the next three to four years. The overall fleet features 161 Airbus and Boeing aircraft. The group launched a $1bn bond in June, which was over five times oversubscribed. Industry body IATA has warned that it expects airlines to suffer a weak end to the year due to waning consumer confidence, sluggish international trade and high fuel prices. European carriers including Lufthansa and Air Berlin reported a drop in third-quarter profits last month.