Emirates Group revenues up 12%

Airline records an 8% increase in H1 profit from the same period last year to reach Dh1.9 billion

Dubai: The Emirates Group, which operates the world’s fourth largest carrier, reported on Wednesday 12 per cent surge on revenues to Dh47.5 billion in the first six months of 2014.

The Dubai-based group said the performance was achieved despite a challenging business environment marked by ongoing health pandemic concerns, regional conflicts, and weakening global markets.

Net profit for the group rose to Dh2.2 billion, an increase of one per cent over the last year’s results.

The group’s cash position on September 30, 2014 was at Dh16.1 billion, compared to Dh19 billion as at 31^st March 2014. This is due to ongoing investments mainly into new aircraft and other airline related infrastructure projects.

“As the biggest operator at Dubai International, we also took the biggest hit to our bottom line from the 80-day runway upgrading works. However, we had anticipated it and made meticulous plans to minimise impact operationally and commercially for both Emirates and dnata. The success of these plans can be seen in our overall growth during this six-month period in spite of the challenge,” said Shaikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group.

“It is those external threats that we cannot anticipate or directly manage, such as the global economic malaise, the Ebola outbreak, currency fluctuations, and regional conflicts, that could negate our efforts and plans. These issues appear to be piling up, impacting commercial aviation and travel, but show no signs of speedy resolution. Therefore it is critical that we stay agile as we grow,” said Shaikh Ahmed.

In a statement, he said the ability to adapt and act quickly would determine our continued success. “Moving forward, we will keep a watchful eye on these challenges, but continue to focus on our long-term goals and invest in the infrastructure of both Emirates and dnata.”

In the past six months, the group continued to develop and expand its employee base, increasing its overall staff count by five per cent to over 79,000 compared with 31 March 2014.

Emirates airline received 13 wide-body aircraft — six A380s, seven Boeing 777s, with 11 more new aircraft scheduled to be delivered before the end of the financial year during the first six months of the fiscal year.

The carrier also expanded its global route network by launching services to four new destinations — Abuja, Chicago, Oslo, and Brussels — exponentially increasing the number of city-pair flight options that it provides to customers across the globe with each new city served.

In the first half of the 2014-15 fiscal year, Emirates airlines’ net profit is Dh1.9 billion, up eight per cent from the same period last year.

Emirates revenue, including other operating income, of Dh44.2 billion was higher by 11 per cent compared with Dh39.8 billion recorded last year, reflecting strong passenger and cargo demand.

Dnata, the airport handling and services division of the group, continued to grow its international business footprint, investing in infrastructure and operations, which now span 38 countries.

Dnata’s revenue including other operating income is Dh4.6 billion, compared to Dh3.7 billion last year. Overall profit for Dnata dropped by 26 per cent to Dh339 million.

“This was due to a number of factors including the impact of the runway enhancement works at Dubai International Airport which saw Dnata handling fewer aircraft during this period, as well as costs incurred to set up and launch handling operations at Dubai World Central,” said the statement.

Dnata’s airport operations remained the largest contributor to revenues with Dh1.4 billion, a three per cent increase compared to the same period last year.

London-based StrategicAero Research chief analyst Saj Ahmad said the most notable signal of Emirates health and strength is the strong cash balance of $4.4 billion — a sum that is larger than the net asset value of some of its floundering competitors and that the carrier is still, in my mind, the fastest growing full service airline in the world.

“In terms of performance, notwithstanding the impact of the runway improvements at Dubai International, Emirates still managed to snare over 23 million passengers, driving up load factors to a high of 81.5 per cent that helped profits rise to $514 million on 11 per cent higher revenues of $12 billion,” Ahmad told Khaleej Times.

“Clearly, Emirates expansion programme is yielding significant cash-positive and yield-positive results as demonstrated by the numbers here,” he said.

“As the biggest operator at Dubai International, it stands to reason that Emirates would be the one impacted most by operations being down to one runway while work was underway. But now that the airport is back up to speed, you can be assured that Emirates full-year earnings will match, if not top the $887 million the airline announced back in May 2014,” he added.

He said the key challenge for Emirates is not so much its performance but rather, the headwinds it faces is that of political and airline opposition in other countries to its expansion plans — most notably in markets like Europe and the USA, where airlines have been struggling to mount either a challenge or stop their cycle of whining and doing something to get passengers onto their own jets as opposed to relinquish them to Emirates.

“That said, Emirates procurement of the 777X will further drive its growth as the airline starts to phase out some of its ageing and early build A380s by the end of the decade alongside opening up new points in its US, Latin America and Asian networks.”

issacjohn@khaleejtimes.com