Dubai-based Emirates airline has reported a whopping 124 per cent increase in profit for its 2017-2018 fiscal year.

According to a 2017-18 Annual Report released by Emirates Group, the airline successfully managed strong competitive pressure across all markets and increased its profit to Dh2.8 billion ($762 million) compared to 2016-2017's figures of $354 million.

The airline's revenues reached Dh92.3 billion ($25.2 billion), supported by strong cargo performance.

The carrier said it was able to increase its revenue despite political challenges impacting traveller demand and fare adjustments due to a highly competitive business environment.

Major cost

Total operating costs increased by 7 per cent over the 2016-17 financial year while the airline’s fuel bill increased substantially by 18 per cent over last year to Dh24.7 billion ($6.7 billion). Fuel is now 28 per cent of operating costs, compared to 25 per cent in 2016-17, and it remained the biggest cost component for the airline.

The airline, however, benefitted from the decline of the US dollar against currencies in most of Emirates’ key markets for the first time in a number of years, witnessing a Dh661 million ($180 million) positive impact to the airline’s bottom line.

“Business conditions in 2017-18, while improved, remained tough. 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," said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group.

Emirates performance

The airline also recorded significant passenger traffic and capacity growth for the fiscal year, with total passenger and cargo capacity crossing the 61 billion mark, to 61.4 billion ATKMs at the end of 2017-18.

Emirates carried a record 58.5 million passengers (up 4 per cent) and achieved a Passenger Seat Factor of 77.5 per cent while capacity increased 2 per cent during the year over 2016-17, with a focus on yield improvement.

Emirates also grew its global connectivity and customer proposition through strategic partnerships. During 2017-18, Emirates entered into significant partnerships with flydubai and Cargolux, expanding the choice of air services on offer to passenger and cargo customers respectively. Emirates also received authorisation to extend its partnership with Qantas until 2023.

The Emirates Group, of which the airline is a unit, reported a 67 per cent jumo in profits to $1.1 billion. The group’s revenue hit Dh102.4 billion ($27.8 billion), an increase of 8 per cent over last year’s results, and the group’s cash balance increased by 33 per cent to Dh25.4 billion ($6.9 billion) supported by the bond issued in March and strong sales due to the early Easter holidays at the end of March.

Emirates closed the financial year with a healthy and increased level of Dh20.4 billion ($5.6 billion) of cash assets. - TradeArabia News Service