Emirates’ net profit rose to Dhs1.9 billion ($514 million) in the first half of 2014/15, up eight per cent year-on-year.
The key benchmark, Revenue Passenger Kilometres (RPKM), was up 9.8 per cent with Passenger Seat Factor increasing and averaging at 81.5 per cent, compared with last year’s 79.2 per cent. The airline carried 23.3 million passengers between April 1-September 30, up 8.4 per cent.
But overall group profit rose one per cent to Dhs2.2 billion ($607 million), in a “challenging business environment” marked by regional conflicts, the Ebola crisis and weakening global markets – although another key reason was a 26 per cent dip in dnata’s profits to Dhs339 million ($92 million), due to the runway repairs programme at Dubai International over the summer and launch costs at Dubai World Central.
Group revenues reached Dhs47.5 billion ($12.9 billion), up 12 per cent, although its cash position dipped from Dhs19 billion ($5.2 billion) to Dhs16.1 billion ($4.4 billion).
The high passenger loads meant there were more mouths to feed and dnata’s in-flight catering operations uplifted 24.7 million meals (up 10 per cent) and it contributed Dhs1 billion ($280 million) of its total revenue (up 15 per cent).
dnata’s Travel Services operation contributed Dhs873 million ($238 million), up 161 per cent, buoyed by international growth with the acquisition of Gold Medal in the UK, while dnata’s cargo handling division’s revenues rose 18 per cent to Dhs644 million ($175 million).
The airline figures are robust given Emirates is the biggest operator at Dubai International, and took the “biggest hit” during the runway programme over the summer, said HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group. Despite softening oil prices, fuel accounts for 39 per cent of operating costs.
During the first six months Emirates received 13 wide-body aircraft (six A380s, seven Boeing 777s) and 11 more are scheduled to be delivered before the end of the financial year (March 31 2015). Emirates also expanded its global route network by launching services to Abuja, Chicago, Oslo and Brussels.
Saj Ahmad, chief analyst, StrategicAero Research, said the figures beat many analysts’ expectations.
“As the airline has aggressively expanded its Airbus A380-800 and Boeing 777-300ER fleets, Emirates has had its razor-sharp focus on launching new routes and increasing frequencies on existing ones, like New York, to complement the demand it is seeing,” he said.
He said airline and political opposition are the biggest challenges facing Emirates.
“There are simply too many anti-Emirates airlines speaking with little evidence to support their wild and outlandish claims that Emirates is subsidised and instead aren’t up to the task of either adapting their poor business models, or aren’t prepared to compete on product or price on a head-to-head basis.”