Emirates Group posts Dh54.4b revenue in first half of 2018-19

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Emirates Group posts Dh54.4b revenue in first half of 2018-19
During the first six months, Emirates received eight wide-body aircraft - three Airbus A380s and five Boeing 777s.

Dubai - The group saw steady revenue growth compared to the same period last year.

by

Issac John

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Published: Fri 16 Nov 2018, 3:55 PM

The Emirates Group on Thursday announced steady revenue growth in the first half of 2018-19, which saw its profits being impacted by a significant rise in oil prices, plus unfavourable currency movements in certain markets.

The group said despite other challenges faced by the airline and travel industry, it generated a revenue of Dh54.4 billion for the first six months of its 2018-19 financial year, up 10 per cent compared to the same period in 2017.

"Profitability was down 53 per cent compared to the same period last year, with the group reporting a 2018-19 half-year net profit of Dh1.1 billion. The profit erosion was primarily due to the significant increase in fuel prices of 37 per cent compared to the same period last year, as well as the negative impact of currencies in certain markets," Emirates said in a statement.

Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman of Emirates airline and Chief Executive of the Emirates Group, said the airline and dnata grew steadily in the first half of 2018-19.

"Demand for our high quality products and services remained healthy, as we won new and return customers across our businesses and this is reflected in our revenue performance. However, the high fuel cost - as well as currency devaluations in markets like India, Brazil, Angola and Iran - wiped approximately Dh4.6 billion from our profits."

The group's cash position on September 30, 2018 was at Dh21.5 billion, compared to Dh25.4 billion as at March 31, 2018.

"We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields, and uncertain economic and political realities in our region and in other parts of the world," said Sheikh Ahmed.

He said the group is keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes.

Sheikh Ahmed said the next six months would be tough, but the Emirates Group's foundations remain strong.

"I am pleased to note that our home and hub in Dubai continues to attract travel demand, as the airline saw nine per cent more customers enjoying Dubai as a destination in the first half of 2018-19 compared to the same period last year. We expect this demand to remain healthy as new attractions come online and the city gears up for Expo 2020 Dubai."

In the past six months, the group's employee base reduced by 1 per cent compared to the figure at March 31, 2018, from an overall average staff count of 103,363 to 101,983. This was largely a result of natural attrition, together with a slower pace of recruitment as the business continues its various internal programmes to improve efficiency through the implementation of new technology and workflows.

During the first six months, Emirates received eight wide-body aircraft - three Airbus A380s and five Boeing 777s - with five more new aircraft scheduled to be delivered before the end of the financial year. It also retired seven older aircraft from its fleet with further four to be returned by March 31, 2019.

The airline's revenue rose 10 per cent to Dh48.9 billion, and profit declined 86 per cent to Dh226 million as it carried 30.1 million passengers, up three per cent, on overall capacity expansion of three per cent.

Saj Ahmad, chief analyst at StratAero Research, said given that Emirates is one of the world's biggest airlines, it stands to reason it would be affected on a greater scale than rivals when it comes to costs relating to oil and fuel. While oil prices have declined in recent days, in the year to November 2018, oil has risen from around $60 to over $80.

With the world's largest Airbus A380 and Boeing 777 fleets, Emirates has had to adapt its business model, redeploy capacity and indeed better match its fare structure to cope with the double-whammy of fuel costs as well as damaging currency fluctuations, said Ahmad.

"Emirates will no doubt remain a profitably entity when it reports its full year earnings in May next year, but it has started to mitigate against the competitive landscape by deepening its links with flydubai - the synergies and enhanced customer network development will assist the airline in more meaningful cost reductions and savings operationally," said Ahmed.

Revenue of dnata rose 11 per cent to Dh7 billion, profit up 31 per cent to Dh861 million, including gains of Dh320 million from one-time transaction.

During this period, Emirates launched new passenger services to Stansted in the UK and Santiago in Chile. It also introduced a new linked service from Dubai via Bali to Auckland. As of September 30, Emirates' global network spanned 161 destinations in 85 countries. Its fleet stood at 269 aircraft including freighters.

- issacjohn@khaleejtimes.com


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