Emirates airline has today posted a 282 per cent jump in half-year profits to $235 million USD on the back of revenues of $12.9 billion – a fall of 3 per cent on the same period in 2018. The chairman and chief executive of Emirates, Sheikh Ahmed bin Saeed Al Maktoum said the results were a testament to its ability to adapt to and navigate “tough trading conditions and social-political uncertainty.”
The massive hike in profits comes despite a 45-day shutdown of one of the two runways at Emirates’ hub at Dubai International Airport earlier this year. The number of passengers Emirates managed to carry in the period dropped as a result by 2 per cent to 29.6 million and the amount of cargo transported by the airline also fell 8 per cent in the first six months of the financial year.
Notwithstanding the fact that passenger yield (the amount of money made per passenger carried) only improved by 1 per cent, Emirates attributed the improved profits to “increased agility in capacity deployment” and “healthy customer demand for Emirates’ products” that drove better margins.
Fuel costs – which are by far Emirates’ largest operating expense – also dropped by 13 per cent. Other operating costs also decreased by 7 per cent – driven in part by a cost-cutting programme, as well as savings associated with the runway closure at DXB.
Sheikh Ahmed said the entire Emirates Group, including its ground handling subsidiary Dnata, had “kept a tight rein on controllable costs and continued to drive efficiency improvement while ensuring that our resources were deployed nimbly to capitalise on areas of opportunity.”
“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins,” Sheikh Ahmed added.
Dnata was hit by the bankruptcy of European travel agent and airline Thomas Cook which it described as one of its major customers in the United Kingdom. Despite that setback, Dnata saw improvements in its worldwide airline catering arm – particularly in Australia and the United States, as well as its travel division following a number of acquisitions.
Emirates posted a full-year profit of $237 million USD for the airline and an overall group profit of $631 million for 2018.
Sir Tim Clark, the airline’s President said earlier this year that trading conditions had been tough but that he fully expected a positive result for its end of year results.