KUWAIT: Fuel savings helped Dubai’s Emirates post a 40 percent jump in annual profit as the state-owned firm’s chairman rejected claims by US rivals that it benefited from subsidies. The airline, one of the world’s largest carriers of international passengers, posted a profit of 4.56 billion dirhams ($1.24 billion) for the financial year to March 31, up from 3.25 billion dirhams from a year earlier.
The latest profit increase comes after a coalition of United States’ airlines and their unions accused Gulf rivals of receiving more than $40 billion in unfair subsidies-charges the carriers including Emirates dismissed. “We (Emirates) have been very transparent,” chairman and chief executive Sheikh Ahmed bin Saeed al-Maktoum told a news conference. “Anybody who would look at the numbers would know where the money is coming from and where it is being spent – every penny. I’m giving my people a bonus today, why should I do that if we were losing money and were subsidized?” Sheikh Ahmed said lower oil prices had saved the airline around 2 billion dirhams during the financial year, with fuel constituting 35 percent of operating costs against 39 percent in the previous 12 months. These helped offset 1.7 billion dirhams of lost revenue from 80 days of runway maintenance at its Dubai International Airport hub. It also helped make up for the impact of the strong dollar, which cost the company 1.5 billion dirhams. “Last year, we saw the strong rise of the US dollar against the currencies in many of our key markets,” said Sheikh Ahmed.
The airline’s annual revenue was 88.82 billion dirhams, 6.18 billion dirhams higher than a year earlier, while costs rose by 4.55 billion dirhams over the same period to 82.93 billion dirhams. “Looking at our year ahead, the currency situation and the security situation in many areas around the world will continue to be our biggest challenge,” said Sheikh Ahmed. “Our industry has always been competitive, putting pressure on our yield.” The world’s biggest customer of the Airbus A380 superjumbo said profit for the wider Emirates Group, which includes airline services arm Dnata, rose 34 percent to 5.5 billion dirhams. Emirates paid a dividend of 2.6 billion dirhams to Investment Corporation of Dubai, the state investment vehicle which owns the airline and stakes in other Dubai companies. It paid 1 billion dirhams for the previous year.
