Another year, another record profit for Emirates

DUBAI – The Emirates Group has announced its 20th consecutive year of net profit, notching a new profit record despite soaring oil prices and challenging business conditions in the second half of its 2007-08 fiscal year.

Group net profits increased 54.1 per cent to AED 5.3 billion (US$ 1.45 billion) for the financial year ended March31, 2008, on revenues of AED 41.2 billion ($ 11.2 billion) compared to the previous year’s AED 31.1 billion ($ 8.5 billion). The Group net margin improved to 13.2 percent from 11.4 percent in the previous year.

The 2007-08 annual report of the Emirates Group – comprising Emirates Airline, Dnata and subsidiary companies – was released in Dubai at a news conference hosted by His Highness Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive, Emirates Airline and Group.

Emirates said the group’s latest record performance reflected its success in growing customer demand through the strategic expansion of its business operations across six continents, supported by ongoing investments in the latest technology, products and customer service “while keeping a tight rein on costs”.

“This is illustrated by the 21.2 million passengers who flew with Emirates in the latest financial year, 3.7 million more than in the previous year; as well as the expansion of Dnata’s international ground handling operations to 17 airports in seven countries.”

Sheikh Ahmed said, “Despite the long-term forecast of a decrease in the number of passengers travelling in First and Business class, I am happy to report that Emirates once again bucked the trend and boosted our seat factor in the forward cabins.

“Emirates is fortunate to be located in Dubai at the centre of the new Silk Road between East and West. I believe the threat of an economic downturn will be offset for Emirates by the boom in the Middle East, especially the thriving travel industry of tourism and commerce.”

Fuel costs remained the top expenditure for the fourth year running, accounting for 30.6 per cent of total operating costs compared with 29.1 per cent the previous year and 27.2 per cent the year before.

He said: “As we plan for the next decade, our biggest challenges will be to find more pilots, engineers, cabin crew and skilled staff across our various business units.”

He also reiterated the Emirates Group’s support for Dubai’s new low cost airline which has been established as a separate entity from the Emirates Group; and remarked on competition in the region, saying: “This is a big cake and admittedly, Emirates has a big slice of it, but there is plenty for the other airlines and we welcome them to the region.”

Emirates Airline’s revenues totalled AED 39.5 billion ($ 10.8 billion), an increase of 32.3 per cent from AED 29.8 billion ($ 8.1 billion) the previous year. Airline profits of AED 5 billion ($1.37 billion) marked a 62.1 per cent increase over 2006-07’s record profits of AED 3.1 billion ($844 million).

The airline attributed the result to improved yields and higher load factors on increased capacity, as well as other operating gains.