Fuel costs fail to burn Emirates' profits

05 May 2005
Dubai-based Emirates Groupannounced on 27 April a 49 per cent increase in net profits to AED 2,600 million ($708 million) in the financial year to the end of March. Despite a sharp rise in jet fuel costs, the Emiratesairline division saw profits also climb by 49 per cent to AED 2,300 million ($637 million) and profits at its Dnatasubsidiary rise by 50 per cent to AED 260 million ($71 million). The group has announced a dividend of AED 368 million ($100 million), up from AED 329 million ($90 million), to its shareholder, the government of Dubai.

Group revenues rose by 36 per cent to AED 19,100 million ($5,200 million), in part as a result of a 20 per cent increase in passenger numbers to 12.5 million. The rise contributed to a 36 per cent increase in airline revenues to AED 18,100 million ($4,900 million) and the passenger seat occupancy factor climbing to 74.6 per cent from 73.4 per cent.

In an apparent attempt to counter accusations from other carriers that it benefits from subsidised fuel, Emirates said that the dramatic rise in oil prices had led to fuel costs rising, to 21 per cent of total expenditure from 14 per cent in fiscal 2003/04, to become the airline's top expenditure item. To counter the increase, the airline introduced fuel surcharges on tickets and put a freeze on recruitment outside cabin, flight deck and engineering staff.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.