Revenues increased by 27 per cent to AED 5,200 million ($1,400 million) over the period. The group announced that a dividend of AED 386 million ($105 million) the previous year, up from AED 368 million ($100 million), would be paid to its shareholder, the government of Dubai.

The profit increase was more modest than in fiscal 2004/05, which saw a 49 per cent jump in net profits. The majority of profits came from the airline, which saw profits rise by 5.8 per cent to a record AED 2,500 million ($674 million).

Passenger numbers were up by 16 per cent to 14.5 million, and the passenger seat factor increased to 75.9 per cent, up 1.3 percentage points on the previous year.

According to Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive officer of Emirates, the airline’s profit was hit by a double whammy of higher jet fuel prices and increased competition.

Fuel accounted for 27 per cent of the carrier’s operating costs, up from 21 per cent in 2004/05. ‘It has been another tough year with pressure from fuel costs continuously dampening our robust net income production,’ said Sheikh Ahmed.

Emirates also outlined its aggressive expansion plans. By 2010, it aims to have 156 aircraft, up from 91 aircraft today.

Over the next eight years, the airline will on average receive delivery of one new aircraft a month. Europe’s Airbus will begin delivering its A380 aircraft in April 2007, and in 2005 the airline signed a AED 35,600 million ($9,700 million) order with The Boeing Company of the US for 42 777s (MEED 25:11:06).

Elsewhere in the group, profits at ground handling agent Dnata rose by 24.6 per cent to AED 324 million ($88 million). Revenue grew by 25.9 per cent to AED 1,800 million ($490 million).

The company handled 25.6 million people, 203,000 aircraft movements, and 1.3 million tonnes of cargo during 2005/06.