Emirates profit rebounds despite global economic headwinds

DUBAI, United Arab Emirates – The parent company of Dubai-based carrier Emirates said Monday that operating profit for the first half of the year surged by more than 63 per cent as the Middle East’s biggest airline expanded routes and benefited from stabilizing fuel prices.

Emirates Group said operating profit rose to 2.37 billion dirhams ($645.7 million) for the first half of 2012 compared to 1.449 billion dirhams ($394.8 million) in the same period last year.

The 63.6 per cent jump is a strong rebound after a sharp drop in profit for the fiscal year ending March 31 due to rising fuel costs. The company also was helped by less volatility across the wider Middle East after last year’s Arab Spring uprisings disrupted flight schedules.

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Emirates Group includes Emirates airline and other businesses such as cargo operations and the travel service Dnata.

Sheik Ahmed bin Saeed Al Maktoum, the company’s chairman and chief executive, said the group rebounded well because of investments into the “infrastructure of both Emirates and Dnata.”

Much of the Emirates Group’s growth was registered at the Emirates airline, which posted a 15.4 per cent increase in passenger traffic to 18.7 million passengers. The group says Emirates airline expanded its fleet to 183 planes in the first half of the year – an increase of nearly 16 per cent. Emirates also added 15 new routes in the past year including Ho Chi Minh City, Barcelona, Lisbon, Erbil and Washington.

“Emirates remained focused on its growth and global expansion despite on-going fluctuating exchange rates and ever lingering high fuel prices which accounted for 39 per cent of our expenditures, down 2 percentage points from last year,” said Sheik Ahmed.

Overall, Emirates Group revenue and other operating income rose to 38.2 billion dirhams ($10.4 billion) in the first half of the year, an increase of 16 per cent compared to the same period last year.

Emirates is locked in strong competition with regional rivals Qatar Airways and Abu Dhabi-based Etihad Airways. But it remains the world’s largest airline in terms of international passenger traffic. It now flies to 126 destinations in 74 countries. It has consistently reported a profit for the past 25 years.