Dubai-based Emirates Airline recorded a net profit of AED786 million ($214 million) for the first half of its 2016-17 financial year, down 75% from AED3.1 billion in the year-ago period. Revenue for the period was down 1% to AED41.9 billion.
The airline said the figures reflected increased market competition that resulted in lower fares, together with unfavorable currency movements because of the strength of the dollar. Additional adverse factors included dampened demand as a result of a subdued economic landscape and security fears that had dissuaded some people from traveling.
Capacity for the half-year, measured in ASKs, was up 12%, outstripping passenger traffic that rose 8% in RPKs. The airline carried 28 million passengers, up 9% on the same period last year.
Load factor dropped 3% to 75.3% compared to the year-ago figures.
In the first half of the year, the airline received eight new Airbus A380s and the same number of Boeing 777s, with 20 more aircraft scheduled to enter the inventory by the end of the financial year. Against this, it retired 19 aircraft, with a further eight to leave by the end of the second half.
Emirates’ operating costs increased 5%. On average, fuel costs were 10% lower compared to the same period last year. Fuel remained the largest component of the airline’s cost, accounting for 24% of operating costs compared with 28% in the first six months of last year.
Emirates Group, which includes the dnata ground handling organization, recorded a net profit of AED1.3 billion, down 64% year-over-year. Revenue was AED46.5 billion, up 1% YOY.
“Our performance for the first half of the 2016-17 financial year continues to be impacted by the strong US dollar against other major currencies,” Group chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said.
“Increased competition, as well as the sustained economic and political uncertainty in many parts of the world, has added downward pressure on prices as well as dampened travel demand.
“The bleak global economic outlook appears to be the new norm,” he warned, “with no immediate resolution in sight.
“Against this backdrop, the Group has remained profitable and our solid business foundations continue to stand us in good stead. In the first six months of this year, both Emirates and dnata continued to grow in capability and capacity. Our past investments in product and services are now paying off, enabling us to retain valued clients and attract new customers—reflected in the airline’s passenger growth of 2.3 million.”
Alan Dron alandron@adepteditorial.com
