Post by Sapphire Capital on May 22, 2009 9:45:08 GMT 4
Emirates profit nosedives 80 pct
May 21, 2009 at 05:40
By Dylan Bowman
Dubai flagship carrier Emirates saw 2008/09 earnings nosedive 80.4 percent due to record fuel prices in the first half of 2008 and the global financial crisis, dragging down its parent company’s net income 72 percent, Emirates Group said on Thursday.
The results are yet another sign of how the financial crisis is battering Dubai's economy. The crisis has caused the real estate market to grind to a halt, economic growth to slow and thousands of expatriates to lose their jobs.
Tourism, a key industry for the emirate, has also been hit, and the results give an indication into just how badly.
The state-owned airline posted profit of 982 million dirhams ($268 million) for the year ended March 31, compared to 5 billion dirhams the previous year.
The airline’s revenues totalled 44.2 billion dirhams, an increase of 9.9 percent from 40.2 billion dirhams a year ago.
Emirates Group, which also includes travel services firm Dnata, saw profit fall to 1.49 billion dirhams, down from 5.3 billion dirhams the previous year.
Dnata posted a 66.4 percent jump in earnings to 507 million dirhams, compared to 304 million dirhams a year ago.
Sheikh Ahmed bin Saeed al-Maktoum, chairman and CEO of Emirates Group, said in a statement the results were “satisfactory” in the economic climate.
Sheikh Ahmed warned of another tough year ahead due to weak premium traffic as people cut back on travel amid the downturn, but forecast “satisfactory growth” for the group in the coming year.
He said earlier this month he expects Emirates to post a profit in 2009/10.
Industry body the International Air Transport Association (IATA) warned in March that Middle East airlines will lose $900 million in 2009, with any increase in passenger traffic cancelled out by rising capacity, as the aviation industry suffers at the hands of the global downturn.
However, the region's major players such as Qatar Airways, Etihad and Emirates have all said they are still on course to hit full year targets.
The Middle East was the only region to register positive passenger growth in March, up 4.7 percent on a year ago, against a global drop of 11.1 percent, according to IATA.
EXPANSION PLANS UNAFFECTED
Sheikh Ahmed said Emirates was pressing ahead with expansion plans, including taking delivery of 18 new aircraft.
“Our development plans remain unchanged,” he said.
“We will progress with our fleet and route expansion plans. With our strong business fundamentals and track record, we have had no problems securing financing for our growth,” he added.
Emirates said the number of aircraft on order, excluding options, was 161, worth approximately $52 billion. Emirates is the largest customer for Airbus’s 380 superjumbo, with 58 on order.
Sheikh Ahmed said earlier this month he did not think the airline had over-ordered, and would not be deferring or cancelling any orders.
Emirates said its seat load factor stood at 75.8 percent for 2008/09, down from 79.8 the previous year, while seat capacity rose 13.4 percent.
It said yield improved by 8.4 percent to 256 fils per RTKM (revenue tonne kilometre), up from 236 fils in 2007/08.
Emirates said fuel remained its top expenditure, accounting for 36.2 percent of operating costs, up from 32.9 percent the previous year.
Oil prices hit an all-time high of $150 a barrel in July 2008, but have since slumped to around $60 as the economic downturn hits demand.
May 21, 2009 at 05:40
By Dylan Bowman
Dubai flagship carrier Emirates saw 2008/09 earnings nosedive 80.4 percent due to record fuel prices in the first half of 2008 and the global financial crisis, dragging down its parent company’s net income 72 percent, Emirates Group said on Thursday.
The results are yet another sign of how the financial crisis is battering Dubai's economy. The crisis has caused the real estate market to grind to a halt, economic growth to slow and thousands of expatriates to lose their jobs.
Tourism, a key industry for the emirate, has also been hit, and the results give an indication into just how badly.
The state-owned airline posted profit of 982 million dirhams ($268 million) for the year ended March 31, compared to 5 billion dirhams the previous year.
The airline’s revenues totalled 44.2 billion dirhams, an increase of 9.9 percent from 40.2 billion dirhams a year ago.
Emirates Group, which also includes travel services firm Dnata, saw profit fall to 1.49 billion dirhams, down from 5.3 billion dirhams the previous year.
Dnata posted a 66.4 percent jump in earnings to 507 million dirhams, compared to 304 million dirhams a year ago.
Sheikh Ahmed bin Saeed al-Maktoum, chairman and CEO of Emirates Group, said in a statement the results were “satisfactory” in the economic climate.
Sheikh Ahmed warned of another tough year ahead due to weak premium traffic as people cut back on travel amid the downturn, but forecast “satisfactory growth” for the group in the coming year.
He said earlier this month he expects Emirates to post a profit in 2009/10.
Industry body the International Air Transport Association (IATA) warned in March that Middle East airlines will lose $900 million in 2009, with any increase in passenger traffic cancelled out by rising capacity, as the aviation industry suffers at the hands of the global downturn.
However, the region's major players such as Qatar Airways, Etihad and Emirates have all said they are still on course to hit full year targets.
The Middle East was the only region to register positive passenger growth in March, up 4.7 percent on a year ago, against a global drop of 11.1 percent, according to IATA.
EXPANSION PLANS UNAFFECTED
Sheikh Ahmed said Emirates was pressing ahead with expansion plans, including taking delivery of 18 new aircraft.
“Our development plans remain unchanged,” he said.
“We will progress with our fleet and route expansion plans. With our strong business fundamentals and track record, we have had no problems securing financing for our growth,” he added.
Emirates said the number of aircraft on order, excluding options, was 161, worth approximately $52 billion. Emirates is the largest customer for Airbus’s 380 superjumbo, with 58 on order.
Sheikh Ahmed said earlier this month he did not think the airline had over-ordered, and would not be deferring or cancelling any orders.
Emirates said its seat load factor stood at 75.8 percent for 2008/09, down from 79.8 the previous year, while seat capacity rose 13.4 percent.
It said yield improved by 8.4 percent to 256 fils per RTKM (revenue tonne kilometre), up from 236 fils in 2007/08.
Emirates said fuel remained its top expenditure, accounting for 36.2 percent of operating costs, up from 32.9 percent the previous year.
Oil prices hit an all-time high of $150 a barrel in July 2008, but have since slumped to around $60 as the economic downturn hits demand.
