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Emirates’ profits down 72 per cent

Business Traveller, 10 May 2012

The Emirates Group announced a $629 million net profit in its 2011/12 annual results today, down from $1.6 billion in the previous year. It marked the group's 24th consecutive year of profit – but the gloss was taken off by a 44.4 per cent rise in the airline's fuel costs to $6.6 billion, which contributed to a 72.1 per cent decrease in the airline's profits to $409 million.

Group revenues climbed to $18.4 billion, up 17.8 per cent, and cash balance grew by 9.5 per cent to $4.8 billion.

HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, attributed the growth to its $3.8 billion investment in new products.

Emirates received 22 new aircraft (14 B777-300ERs, six A380s and two freighters), its highest in any single year, and added 11 new destinations. Passenger volumes rose 8 per cent to 34 million and passenger seat factors stood at 80 per cent. East Asia and Australasia remained the highest revenue contributing region at $5 billion, up 17.6 per cent, although Europe (up 18.2 per cent to $4.6 billion) and Americas (up 21.3 per cent to $1.8 billion) also saw significant growth.

"Managing volatile exchange rates, coupled with our highest ever fuel bill has required immense tenacity," said Sheikh Ahmed.

"Retaining growth and remaining profitable in these challenging economic times shows our profound understanding of the markets that we do business in."

With operating costs increasing by 24 per cent, compared with revenue increase of 16.2 per cent over last year, Emirates said it "bore the brunt of the crippling cost of fuel for nearly one year", before reluctantly introducing a fuel surcharge on all tickets.

Despite fuel costs, Emirates revenue reached a record high of $17 billion, up 14.9 per cent.

Political unrest across the MENA region posed additoinal challenges, but Emirates said it was able to maintain profitability by modifying capacity and schedules.