Emirates airline’s profit slumped 69 per cent in the 2018-2019 financial year as the Dubai-based carrier faced higher fuel prices and slowing travel demand in regional economies.
The largest international carrier reported a profit of Dh871m ($237m), its weakest earnings in a decade, as revenue grew by 6 per cent to Dh97.9bn for the year ending March 31.
“2018-19 has been tough, and our performance was not as strong as we would have liked,” Sheikh Ahmed bin Saeed Al Maktoum, chief executive of Emirates Group, said in a statement.
“Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets. . . and we also saw travel demand weaken, particularly in our region.”
The government-owned airline’s traffic remained steady, with 58.6m passengers carried, up 0.2 per cent on 2017-2018.
Emirates said passenger seat factor, a measure of its capacity utilization, declined slightly to 76.8 per cent, reflecting slowing regional economies on travel demand and strong competition, Emirates said.
Operating costs rose by 8 per cent in 2018-2019 as the average price of jet fuel increased by 22 per cent, on top of the previous period’s 15 per cent hike.
The fuel bill, the largest in the airline’s history, was up 25 per cent at Dh30.8bn, accounting for 32 per cent of operating costs.
The relative strength of the US dollar against currencies in the airline’s key markets had a Dh572m negative impact, compared with the previous year’s positive impact of Dh661m.
The airline increased capacity by 3 per cent in the 2018-19 financial year. It received 13 new aircraft, including seven A380s and six Boeing 777-300ERs. With the phasing out of 11 planes, the fleet reached 270 at the end of March.
Emirates launched three new destinations: London Stansted and Edinburgh in the UK and Santiago in Chile.
The airline’s partnership with sister company Flydubai has also opened up 67 more destinations served by the low-cost carrier.
Emirates Group, which also includes cargo and airport operations, reported a profit of Dh2.3bn, down 44 per cent on the previous year, as revenue reached Dh109.3bn, up 7 per cent.
The group reported a dividend of Dh500m to its owner, the Investment Corporation of Dubai, the emirate’s state holding company.