US LEGACY CARRIERS RATTLED AS EMIRATES POSTS 27TH CONSECUTIVE YEAR PROFITS
(Posted 08th May 2015)
The 1.5 billion US Dollars profit posted by the Emirates Group, incidentally the second highest in the company’s history, has reaffirmed the airlines’ strategy of being a global connector of people, operating an exclusively wide body aircraft fleet and being the largest operator of the world’s biggest passenger aircraft, the Airbus A380. The result in fact defeats common understanding as after all the number of flights the airline operated in mid-2014 had to be curtailed by nearly a quarter while the two runways at Dubai International Airport for a period of 80 days but this temporary capacity dent did not translate in any dent in profitability for the financial year overall.
Investments, in fact huge investments in upgrading the airline’s present hub airport DXB in Dubai and the ongoing development of the 5 runway Dubai World Central, in short DWC in Jebel Ali, have provided the environment for Emirates to grow in leaps and bounds and the ongoing launch of new routes and additional frequencies and the upgrading of routes to the use of Airbus A380’s has won over the global travelers in unprecedented numbers.
Said the airline in a statement sent to this correspondent yesterday afternoon:
Start quote:
Emirates, a global connector of people and places, today announced their annual revenues. It is its 27th consecutive year of profit and steady growth across the company, ending the year in a strong position despite the many global and operational challenges during this period. The financial year ending 31 March 2015 also marked the achievement of new capacity milestones at both Emirates and dnata, as the Group continued to expand its global footprint, and strengthen its business through strategic investments.
The group has recorded the second highest profit ever with USD 1.5 billion. A Steady revenue and business growth in line with capacity increases, significant investment in the business at USD 5.5 billion.
Emirates further declared a dividend of USD 700 million to the Investment Corporation of Dubai. Emirates makes a profit of USD 1.2 billion, as revenue increases by7% to USD 24.2 billion. The capacity crossed 50 billion ATKM (Available Tonne Kilometres) for the first time in the airline’s history.
Additionally, dnata, one of the largest suppliers of combined air services in the world offering aircraft ground handling, cargo, travel, and flight catering has made profits worth USD 247 million, recording its highest-ever in 56 years. With a revenue of USD 2.8 billion exceeds AED 10 billion for the first time.
Emirates’ international business now accounts for over 60% of revenue.
“2014-15 was a turbulent year for aviation. The fall in oil prices provided cost relief in the second half of our financial year, however it did not offset the hit to our profitability caused by significant currency fluctuations, nor the hit to our revenue from operational adjustments in addressing the Ebola outbreak, armed conflicts in several regions, and the 80-day runway upgrading works at Dubai International airport (DXB). Achieving our 27th consecutive year of profit and one of our best performances to date, is testimony to the strength of our brands and business fundamentals, as well as the dedication and talent of our workforce,” said His Highness (H.H.) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.
The strong rise of the US dollar against currencies in many of Emirates’ and dnata’s key markets had an AED 1.5 billion (US$ 412 million) impact to the Group’s bottom line, while the 80-day disruption at DXB had an estimated impact of AED 1.7 billion (US$ 467 million) on Group revenue.
“Every year brings a new set of challenges. In addressing these, we are always guided by the best interest of our people, our customers, and our long-term goals. As a Group, we keep a close eye on our top and bottom lines, but we never take our foot off the gas pedal when it comes to investing to enhance our business performance, and looking after our people. In 2014-15, the Group collectively invested over AED 20.2 billion (US$ 5.5 billion) in new aircraft and equipment, modern facilities, the latest technologies, and staff initiatives. This was the second highest amount ever in one financial year after last year’s record investment.”
The Group’s employee base across its more than 80 subsidiaries and companies increased by 11% to over 84,000-strong representing over 160 different nationalities.
“Looking ahead, the ongoing uncertainty for many currencies and economic markets around the world will continue to pose a challenge, as will the looming threat of protectionism in some countries. However, we move into the new financial year with confidence, and a strong foundation for continued profitability with our strong balance sheet, solid track record, diverse global portfolio, and international talent pool,” said Sheikh Ahmed. “We will continue on our journey of steady and rational growth, and work even harder to meet and exceed our customers’ expectations.”
In line with the overall profit increase, the Group declared a dividend of AED 2.6 billion (US$ 700 million) to the Investment Corporation of Dubai.
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The result will no doubt also rattle the US’ legacy carriers which have of late launched a dirty tricks campaign based on rumours and anti-Gulf sentiments, having come to realise that they can no longer compete with services on board and on the ground, the state of their fleets and regulatory issues at home which often limit operations at key airports at crucial night hours. This curtails the fleet utilization as is by the way the case in Europe too and subsequently do such measures impact on the profitability of airlines. Staring no doubt with increasing envy at this latest profit announcement by a Gulf airline do they need reminding that they have in the past repeatedly sought protection from creditors under Chapter 11 rules, in the process welshing suppliers and staff and still not making inroads in the direct head on competition between the three US giants and the three Gulf giants.
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