Gulf juggernaut Emirates more than doubled its profit to $US762 million in 2017-18 despite competitive pressures, political instability, and rising oil prices.
The world’s biggest international carrier benefitted from the weaker US dollar as well as the surge in the cargo industry as revenue rose 9 percent to $US25.2 billion.
Passenger numbers rose 4 percent to a record 58.5 million as the airline filled more seats as it kept capacity growth tight at 2 percent compared to 2016-17.
The passenger load factor rose 2.4 percentage points to 77.5 percent as passenger yield, a measure of average fares, increased 6.9 US cents per revenue passenger kilometre.
“Business conditions in 2017-18, while improved, remained tough,’’ Emirates chief executive and chairman Sheikh Ahmed bin Saeed Al Maktoum said. “We saw ongoing political instability, currency volatility and devaluations in Africa, rising oil prices which drove our costs up, and downward pressure on margins from relentless competition.
“On the positive side, we benefitted from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar.”
The airline received 17 new aircraft during the financial year — eight A380s and nine Boeing 777-300ERs — and phased out eight older aircraft to bring the fleet count to 268 at the end of March.
This brought its average fleet age to 5.7 years, something the airline said underscored its strategy to operate a young a modern fleet to benefit its operations and customers.
Total operating costs increased by 7 percent with the airline’s fuel bill rising 18 percent over last year to $US6.7 billion.
Fuel now represents 28 percent of the airline’s operating costs, compared to 25 percent in 2016-17, and remains its biggest cost.
The airline said it continued to tap diverse financing sources to fund its strategy and ended the financial year with Increased cash assets of $US5.6 billion
The Emirates Group, which includes logistics arm dnata, reported a profit of $US1.1 billion.
But it said it remained focused on costs and its total workforce down 2 percent on the previous year.
“While expanding our business and growing revenues, we also tightened our cost discipline,’’ Sheik Ahmed said. “Across the Group, we progressed various initiatives to rebuild and streamline our back office operations with new technology, systems and processes.
“In 2017-18, our reduced recruitment activity, coupled with restructured ways of working gave us gains in productivity, and a slowdown in manpower cost increases.”