São Paulo – Emirates Airline reported an 86% drop in net profit in the first half of fiscal year 2018-19, due to a hike in fuel prices and to unfavorable currency movements. H1 net profit was USD 62 million, as per a report made public this Thursday (15).
Emirates saw USD 13.3 billion in revenues, including operating income, up 10% from a year ago. Operating costs were up 13%, while overall capacity was up 3%.
Fuel spending climbed 42% year-on-year in H1 on the back of a 37% hike in oil prices and a 4% increase in consumption, which in turn was driven by fleet expansion. Fuel remained the primary cost component for Emirates at 33% of operating costs, up from 26% a year ago.
Emirates carried 30.1 million passengers from April 1st to September 30, 2018, up 3% year-on-year. Average passenger seat factor climbed to 78.8% from 77.2%. The carrier said it managed to improve seat factor despite the fact that its rates increased. Cargo volumes remained virtually unchanged at 1.3 million tons, while yield increased by 11%.
In H1 2018-19, Emirates received 8 wide-body aircraft – 3 Airbus A380 and 5 Boeing 777 –, with 5 more units due for delivery in the ongoing fiscal year. Its global network spans 161 destinations in 85 countries, with a fleet of 269 aircraft, including freighters as of September 30.
dnata
Emirates’ ground handling division dnata posted USD 235 million in net profit from April to September, up 31% from a year ago. The number includes gains from a one-time transation which saw dnata divest its 22% stake in the Hogg Robinson Group, during the latter’s acquisition by Amex Travel Business Group. Weren’t it for this deal, dnata profit would have been down 18% year-on-year.
dnata saw constant growth across its global business in 35-plus countries, Brazil included. During H1 2018-19, international operations by dnata accounted for over 68% of its USD 1.9 billion in revenue, up 11%. This performance was underpinned by robust organic business growth, particularly in international airport operation.
The Group
The Emirates Group, comprising the airline and dnata, reported a 53% drop in net profit to USD 296 million, while revenue climbed 10% to USD 14.8 billion.
The Group achieved steady revenue growth, while profit took a hit from a significant hike in oil prices and unfavorable currency movements in some markets, including Brazil, “amidst other challenges for the airline and travel industry,” its report reads.
Emirates Airline chairman and Emirates Group CEO Ahmed Bin Saeed Al Maktoum said “high fuel cost as well as currency devaluations in markets like India, Brazil, Angola and Iran, wiped approximately USD 1.2 billion from our profits.”
Maktoum said his outlook is positive regarding the company’s future: “Our home and hub in Dubai continues to attract travel demand, as the airline saw 9% more customers enjoying Dubai as a destination in the first half of 2018-19 compared to the same period last year. We expect this demand to remain healthy as new attractions come online and the city gears up for Dubai Expo 2020.”
Translated by Gabriel Pomerancblum
