Dubai's Emirates airline may revive its hedging program to help guard against soaring fuel costs, which forced it to pay an additional $1 billion in its half year results alone, its chairman said.

Sheikh Ahmed bin Saeed al-Maktoum said in an interview that 2011 earnings for the fast-growing carrier, whose fiscal year ends March 31, may be hit by fuel expenses.

'Sometimes we have to accept that higher fuel prices is less profit,' Sheikh Ahmed, who is also the uncle of Dubai's ruler and a central figure in the emirate, said when asked about earnings expectations for 2011.

Dubai government-owned Emirates' profits slumped 76 percent in the first half of the 2011 fiscal year as fuel costs and currency fluctuations hit the carrier.

Fuel typically accounts for a third of an airline's operating costs. Emirates said fuel costs took up 41 per cent of total operating costs in its half-year results for the year ending March 31, 2012, up from 33 per cent a year before.

'We used to have a (hedging) program,' he told Reuters in a downtown Seattle hotel after Emirates launched a non-stop flight to the US city.

'We are looking at a program to see what exactly we should be doing but we didn't take a decision yet about how we are going to go about it.'

After a turbulent 2011 partly due to unrest in the Middle East, rising fuel prices and financial turmoil in Europe signal big problems for the international airline industry in 2012 and are likely to force a cutback in flights, according to two key aviation bodies.

'It will be a good year if we take into account all ... the issue will always be related to fuel costs,' Sheikh Ahmed said of the airline's 2011 earnings.

Emirates is the world's largest customer of the Airbus  A380 superjumbo. It ordered 90 A380 aircraft in 2010, with about 70 yet to be delivered.

Last month, Airbus chief executive Tom Enders ordered an internal investigation into how the company allowed wing cracks to develop on the A380.

Fixing the cracks involves taking the giant 525-seat plane out of service for several days, for which Airbus is expected to have to compensate airline customers.

'They have to look at it seriously. The program which they are putting now to do all the fix on those aircraft is good ... (but they) need to be a bit quicker in resolving it,' Sheikh Ahmed said.

Emirates will receive the 1,000th delivery of Boeing's wide-body 777 this month, it was announced at an event in Seattle on Friday.

Sheikh Ahmed, who is also chairman of Dubai's largest bank Emirates NBD and heads the emirate's financial support fund, said debt obligations by state-linked firms will be met this year.

The emirate has clawed its way back from the depths of its 2009 debt crisis, helped by an economic revival in trade and tourism and its safe-haven status amid the Arab Spring revolts, but still faces the challenge of big debt repayments.

Billions of dollars in bonds owed by state-linked firms like Jebel Ali Free Zone Authority and DIFC Investment are in the spotlight as investors weigh Dubai's refinancing 2012 risks.

'I'm really happy with the restructuring in place today. We see the performance of the business that they are in is actually good,' Sheikh Ahmed said of state-linked entities.

However, he warned that Western pressure to curb business ties with Iran, a traditional trading partner of the emirate, may have an impact on its economy.

Last week, it emerged the US government had forced Dubai-based Noor Islamic Bank to stop channelling billions of dollars from Iranian oil sales through its accounts.

'Maybe not only on the banking sector. I'm more concerned about this tradition of existing traffic between the two countries. I would say all of it had nothing to do with the nuclear program of the Iranians,' said Sheikh Ahmed.

'It's straightforward trade between the two countries. It's individuals who will be affected out of this business. Or people who are really in line of business on goods between the two countries,' he added.-Reuters