The Hindu Business Line : Emirates Group posts $762-m net profit

Emirates Group on Wednesday announced another record performance with net profit of Dhs 2.8 billion ($762 million) for the financial year ended March 31, 2006 — up 5 per cent from the previous year's record profits of Dhs 2.7 billion ($726 million).

The group's revenue increased by an impressive Dhs 5.2 billion ($1.4 billion) or 27 per cent, to Dhs 24.3 billion ($6.6 billion) compared to Dhs 19.1 billion ($5.2 billion) last year. The group's cash balance was a robust Dhs 11 billion ($3 billion) at the end of March, an improvement of 28.6 per cent against a year earlier, according to a statement issued by the airline.

Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said the group's sharp sales growth and record returns reflect customers' increasing preference for its products, as illustrated by the two million more passengers who flew Emirates in the latest financial year, for a new record total of 14.5 million.

Sheikh Ahmed said, "These results clearly show that Emirates' customer-oriented approach and investments in providing a quality product has paid off in terms of retaining and winning new customers globally." He continued, "It has been another tough year with pressure from fuel costs continuously dampening our robust net income production. Emirates has returned its 18th consecutive annual profit, and we are pleased to have achieved this solid performance, while expanding our operations in an increasingly competitive environment."

Operating costs

Fuel costs remained the top expenditure accounting for 27.2 per cent of total operating costs, up from 21.4 per cent the previous year. Like other airlines, Emirates was forced to increase fuel surcharges on tickets, which only covered 41 per cent of incremental costs.

The airline's jet fuel risk management programme helped mitigate fuel costs, saving the company $189 million in 2005-06, 50 per cent more than last year

Fleet expansion

With the addition of 16 new aircraft during the financial year, Emirates' fleet reached 91 at the end of March. The current fleet (April 2006) comprises 92 aircraft — 83 wide-bodied passenger aircraft and nine freighters, with an average age of 61 months — more than 10 years younger than the industry's average of 187 months.

One of the key highlights of the year was Emirates' signing of a massive Dhs 35.6 billion ($ 9.7 billion) contract for 42 Boeing 777 aircraft at the 2005 Dubai Air Show.Emirates launched services to eight new cities in 2005-06 — Alexandria, Abidjan, Addis Ababa, Hamburg, Kolkata, Thiruvananthapuram, Seoul and Lilongwe (cargo-only) — bringing the network total to 83 destinations, five of them cargo-only. In addition, it increased the frequency of passenger services and also added capacity with bigger aircraft — to over a dozen existing destinations adding 67 extra flights per week across its network.

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