Financial Times

Emirates struggling, half-year profits down 88%


Dubai – With high fuel prices hitting the airline industry, Emirates Airline’s profit of Dhs 284 million (US $77 million), for the first six months of its current financial year ending 30th September 2008 was sharply down 88 % against the previous year’s corresponding period.

“The first half of the year has been very tough for the airline industry, with record fuel prices forcing many carriers to shut shop or consolidate,” said Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group in a statement to the media.

He said recent events show that only the most efficient businesses will survive and prosper and added that (recent) investments put the airline in a strong position to weather the current crunch and future challenges. The airline has made massive investments in eco-efficient aircraft fleet; opened a world class airport terminal dedicated to Emirates operations and strengthened its global route network.

Sheikh Ahmed added: “Our business fundamentals are solid, and providing there is no further fall-out from the current global financial situation, we anticipate a robust second half of the financial year.”
Crude oil prices averaged $122 per barrel for the first six months of the financial year, up from an average of $67 for the same period last year, whilst the differential between crude and aviation fuel was also up from an average of $16 per barrel to $28. Overall, Emirates’ fuel costs were higher than budgeted by Dhs 1.7 billion ($469 million).

The drop in profits reflect a 40 % increase in airline unit costs per tonne kilometre, with fuel spend more than doubling from last year’s Dhs 4.1 billion ($1.1 billion) to Dhs 9.2 billion ($2.5 billion).

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