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Emirates Profits Drop By 53%: High Fuel Prices, Currency Instability

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Emirates Profits Drop By 53%: High Fuel Prices, Currency Instability

Emirates Profits Drop By 53%: High Fuel Prices, Currency Instability
November 15
11:42 2018

LONDON – Emirates’ profitability has been reduced by 53% according to its published reports released this week. Profits dropped to $296 million due to a 37% increase in fuel costs as well as the negative impact of currencies in certain markets.

The Emirates Group’s revenue, however, has increased by 10% to $14.8 billion from $13.5 billion in the same period last year.

Courtesy of Emirates.

Cash flow has decreased by $1 billion from the $6.9 billion that were registered during the first half of 2017.

Chief Executive and Chairman of Emirates Group, HH Sheikh Ahmed bin Saeed Al Maktoum, stated that the likes of Emirates and handling company dnata have both “grew steadily” and that “demand for our high quality products and services remained healthy”.

Al Maktoum did concede that “the high fuel cost as well as currency devaluations in India, Brazil, Angola, and Iran, wiped approximately AED 4.6 billion” from the Group’s profits. 

On a breakdown, the Emirates Airline recorded revenues of $13.3 billion, which is also 10% up but featured a profit decline of 86% to $62 million. 

30.1 million passengers flew the airline during the first six months of the year, representing a 3% increase. Passenger numbers into Dubai also saw an increase of 9%. increase to the hub city. 

As far as load factors are concerned, Emirates reported an increase to 78.8% from last year’s 77.2%, with the carrier also handling around 1.3 million tonnes of cargo.

Al Maktoum considered that the carrier is “proactively managing the myriad challenges faced” and that it will “continue to drive efficiency improvement through the implementation of new technology and business processes.”

For handling agent dnata, which is owned by Emirates Group, the firm recorded an 11% increase in revenue at $1.9 billion as well as profits rising by 31% to $235 million.

dnata noted a AED 320 million one-off transaction, which without this, would have reduced profitability by 18% compared to last year.

The handling agent took care of 350,052 aircraft, which is up 6% compared to the same period last year, followed by a 2% increase in cargo to 1.5 million tonnes. 

However tough this year’s exercise, Al Maktoum was confident saying that although “the next six months will be tough… the Emirates Group’s foundations remain strong”, hinting that they may get decreased results again but nowhere near a loss-making carrier anytime soon.

Picture from Airbus.

The carrier has increased capacity by 4% in 1H18 thanks to the arrival of eight brand-new aircraft, consisting of three Airbus A380s and five Boeing 777s. 

It will be interesting to see what the second half results will hold for Emirates and whether the carrier can keep profitability together without significant decreases in that area. 

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James Field

James Field

James is a passionate AvGeek based in Manchester, U.K who has been actively spotting for years. James has been an Aviation Enthusiast for 8 years and has a fond likening to Concorde! James hopes to grow in the aviation industry with journalism being his primary focus.

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