• Profits 65 per cent higher than in the same period of the previous financial year
  • Revenues drop 2.3 per cent
  • Cash position $1.5 lower by close of first half

Dubai’s Emirates Group posted net profits worth AED3.7bn ($1bn) in the first half of its 2015-16 financial year, which is 65 per cent higher than the figures for the first half of the previous year.

Emirates attributed the impressive performance on its first-half profits, one of the best ever in its history, primarily to lower fuel prices, the largest single item in an airline’s operating cost.

Part of the savings made from lower fuel prices, the company says, was passed on to passengers through the reduction of fuel surcharges and lowering fares across their network.

The strong dollar, which weakened many currencies including the Russian Rouble and Chinese Yuan, along with the economic and geopolitical uncertainties in the region pushed revenues 2.3 per cent lower to reach $12.6bn compared to the same period in 2014-15.

The company’s cash position is also lower at the end of the first half, at $4bn, compared to $5.5bn in March. This is attributed to the company’s continued investments, airline related infrastructure projects and business acquisitions.

Emirates received three Boeing 777 units in September, bringing its current in-service fleet to 237 and its on-order jets to 273, of which 197 is made with Boeing and the rest with France’s Airbus.

In July Dnata, Emirates’ ground handling unit acquired, Amsterdam-based Aviapartner cargo handling operations at an undisclosed value.

In spite of the currency situation and the lower fuel prices, Emirates Chairman and Chief Executive Ahmed bin Saeed al-Maktoum said in a statement that they made “a calculated decision not to hedge fuel purchases, which paid off as fuel prices continued to soften.”

Emirates’ profits in the first half validate’s Boeing’s forecast that the Middle East airlines’ collective profits in 2015 will be equivalent to 50 per cent of the profits made over the past five years, due primarily to lower fuel prices.

The first-half results for UAE’s low-cost airlines are not as rosy.Flydubai registered a loss of $40m despite an 8.7 per cent revenue growth compared to the corresponding period in 2014. Air Arabia’s profits fell 4 per cent against a dismal quarter of a per cent revenue increase during the same period.