Dubai airline Emirates H1 net profit slumps 75%

Emirates reported a 75 per cent fall in first-half net profit from its airline operations as Dubai’s flagship airline was buffeted by a strong dollar and tougher competition.

The world’s largest carrier of international passengers reported a profit of Dhs786m ($214m) for the six months to September 30.

Increased competition and political and economic uncertainty in many parts of the world had dampened prices and travel demand, Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum said in a statement.

Emirates said profit for the wider group, which includes airline services arm Dnata, fell 64 per cent to Dhs1.3bn.

“The bleak global economic outlook appears to be the new norm, with no immediate resolution in sight,” Sheikh Ahmed said.

Emirate’s average passenger seat factor fell to 75.3 per cent in the first half from 78.3 per cent a year earlier.

Africa has been in focus in recent weeks. Emirates suspended its four times weekly service between Dubai and Abuja, Nigeria, effective October 30.

These negative factors overshadowed a 10 per cent fall in the average cost of fuel. Fuel costs accounted for 24 per cent of operating costs, down from 28 per cent a year earlier.

Its earnings in the first half of its 2015-16 fiscal year were boosted by a decision not to hedge on fuel costs.

Emirates on Wednesday made no mention of a crash on August 3 involving one of its jets which temporarily closed its hub, Dubai International. It was the first significant accident in the airline’s more-than-30-year history.