Emirates posts 165% rise in H1 profit

Dubai-based airline Emirates on Thursday said that first half profit more than doubled, boosted by passenger traffic gains and cost cutting.

The largest Arab airline said that net profit rose 165 percent to AED752m ($205m) in the six months ending September 30, from AED284m ($77m) in the year earlier period.

But revenue declined 13.5 percent to AED19.8bn ($5.4bn) in the period, and the company said it could take one to two years before demand for air transport picks up.

“The months since the global meltdown have really tested our mettle. Unlike others in the industry, Emirates did not cut back on its product, service or people,” said chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum.

“Instead, we invested in these areas and looked to our people to develop ever more innovative ways to manage costs, improve efficiencies, reallocate resources, and drive alternative strategies for the business.”

The decline in revenue largely reflected lower passenger and cargo yields, the company said.

Cost cutting and lower fuel prices contributed to a 15.8 percent decline in total cost expenditure, which came in at AED19.0bn ($5.2bn).

Capacity measured in available seat kilometers (ASKM), grew by 22 percent, while passenger traffic measured in revenue passenger kilometers (RPKM) was up 21 percent.The passenger seat factor declined 1.3 percent to 77.5 percent.

“While some say the green shoots of economy recovery are sprouting, we expect it will take at least another year or two, before demand for air transport and travel services starts picking up again. In the meantime, Emirates is well-placed to weather the rest of the storm,” Sheikh Ahmed said.

Emirates said it raised aircraft financing of AED3.3bn ($0.9bn) in the period.

The company’s cash position as of September 30 was AED6.7bn ($1.8bn), compared to AED7.4bn ($2.0bn) six months earlier. This was after funding an ongoing capital expenditure programme that included pre-delivery payments for new aircraft on order, building projects in Dubai, and an upgrade of the interiors of some of the existing fleet. Emirates' current fleet size is 139 aircraft. The airline has taken delivery of eight new wide body aircraft since the beginning of the financial year, with another 10 new jets scheduled to be delivered before March 31.