Fuel savings helped Dubai’s Emirates post a 40 per cent jump in annual profit on Thursday as the state-owned firm’s chairman rejected claims by U.S. rivals that it benefited from subsidies.
The airline, one of the world’s largest carriers of international passengers, posted a profit of Dhs4.56 billion ($1.24 billion) for the financial year to March 31, up from Dhs3.25 billion a year earlier.
The latest profit increase comes after a coalition of United States’ airlines and their unions accused Gulf rivals of receiving more than $40 billion in unfair subsidies — charges the carriers including Emirates dismissed.
“We (Emirates) have been very transparent,” Chairman and CEO Sheikh Ahmed bin Saeed al-Maktoum told a news conference.
“Anybody who would look at the numbers would know where the money is coming from and where it is being spent – every penny. I’m giving my people a bonus today, why should I do that if we were losing money and were subsidised?”
Sheikh Ahmed said lower oil prices had saved the airline around Dhs2 billion during the financial year, with fuel constituting 35 per cent of operating costs against 39 per cent in the previous 12 months.
These helped offset Dhs1.7 billion of lost revenue from 80 days of runway maintenance at its Dubai International Airport hub.
It also helped make up for the impact of the strong dollar, which cost the company Dhs1.5 billion.
“Last year, we saw the strong rise of the US dollar against the currencies in many of our key markets,” said Sheikh Ahmed.
The airline’s annual revenue was Dhs88.82 billion, Dhs6.18 billion higher than a year earlier, while costs rose by Dhs4.55 billion over the same period to Dhs82.93 billion.
“Looking at our year ahead, the currency situation and the security situation in many areas around the world will continue to be our biggest challenge,” said Sheikh Ahmed.
“Our industry has always been competitive, putting pressure on our yield.”
The world’s biggest customer of the Airbus A380 superjumbo said profit for the wider Emirates Group, which includes airline services arm Dnata, rose 34 per cent to Dhs5.5 billion.
Emirates paid a dividend of Dhs2.6 billion to Investment Corporation of Dubai, the state investment vehicle which owns the airline and stakes in other Dubai companies. It paid Dhs1 billion for the previous year.