10 November 2008

Emirates profits dive by 88%

Emirates saw half-year profits plunge by 88% in the half year ending September 30.

The UAE carrierÃ¢â¬â¢s net profit in the six month was just $77 million against $643 million for the same period last year.

The decline was blamed on the impact of the record fuel prices earlier this year.

Fuel spend more than doubled from $1.1 billion to $2.5 billion.

The results from the Dubai-based carrier follow British Airways showing a half-year profits decline of more than 90% (see previous TravelMole story).

Crude oil prices averaged $122 per barrel for the first half of the financial year, up from an average of $67 for the same period last year, Emirates said.

The differential between crude and aviation fuel was also up from an average of $16 per barrel to $28. EmiratesÃ¢â¬â¢ overall fuel costs were higher than budgeted by $469 million.

The airlineÃ¢â¬â¢s chairman and chief executive Sheikh Ahmed bin Saeed Al-Maktoum said: Ã¢â¬ÅâœThe first half of the year has been very tough for the airline industry, with record fuel prices forcing many carriers to shut shop or consolidate.

Ã¢â¬ÅâœEmirates has worked hard to manage the impact of high fuel prices on our unit costs, while continuing to grow our business and provide our customers with a quality product and service.Ã¢â¬~

He added: Ã¢â¬ÅâœRecent events show that only the most efficient businesses will survive and prosperÃ¢â¬~, claiming the carrier was in a strong position to weather the credit crunch and future challenges.

Sheikh Ahmed said: Ã¢â¬ÅâœOur business fundamentals are solid, and providing there is no further fall-out from the current global financial situation, we anticipate a robust second half of the financial year.Ã¢â¬~

Passenger traffic was up 11% and passenger yield increased by 20% in the half year.

by Phil Davies