Emirates Airlines flies high with 23rd year of profit

DUBAI, UAE: The Emirates Group has marked its 23rd consecutive year of profit with a record performance of AED 5.9 billion (US$ 1.6 billion) net profit, despite a challenging business climate.

The 2010-11 Annual Report of the Emirates Group – comprising Emirates Airline, dnata and their subsidiary companies – was released in Dubai yesterday at a news conference hosted by Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.

“This year’s record results represent our drive to push the boundaries of aviation, questioning the norms and advocating for open and fair competition. Despite unforeseen challenges in the form of political instability and shocking natural disasters we have managed, through sheer determination, nimbleness and quick thinking, to produce our best ever result,” said Sheikh Ahmed.

In the face of many challenges, both political and environmental, the Group’s revenue increased by 26.4 per cent reaching a remarkable new level at AED 57.4 billion (US$ 15.6 billion). Strong revenue has been the main driver for the Group’s record financial performance. The Group’s cash balance rose substantially to hit a record high at AED 16 billion (US$ 4.4 billion).

The Group’s exceptional performance this year owes much to its dexterity and ability to adapt to changing market conditions quickly. In the first six months Emirates was able to capitalise on strong market demand thanks to its superior network and world-class product.

With political instability across parts of the world coming to the fore in the second half of the year, Emirates was able to swiftly adjust flight schedules, redeploying aircraft to balance the network and optimise revenue. The airline’s notable ability to drive revenue, in the midst of an unstable business environment enabled it to partially shield itself against a dramatic increase in fuel prices in the second half of the year.

During the year, dnata forged forward with its international expansion through its proven strategy of acquisition, taking ownership of Alpha Flight Group Ltd., a leading caterer with operations in 61 airports globally. By being open to new business opportunities and continually seeking growth dnata has now become the world’s fourth largest air services provider.

“A clear indication of our strength, this year’s financial result represents the tireless work of our 57,000 strong workforce. Operating without subsidy and through a well-thought-out business model we have, as a team, been able to confront adversity on many levels,” added Sheikh Ahmed.

Customers’ continued preference for Emirates’ products has helped achieve sharp sales growth, record return for the financial year and the airline’s highest ever passenger numbers.

“Emirates continues to dismiss the perceived limitations of the aviation industry, advocating for an open skies environment that stimulates competition, an undeniable positive for the customer. The customer is at the heart of our operations, evident in the 31.4 million passengers that flew with us throughout the financial year, an increase of 14.5 per cent or four million passengers on last year.”

On course with its financial commitments a net amount of AED 1.8 billion (US$ 500 million) was used to repay a bond that matured on 24 March 2011. The bond, listed on the Luxembourg Stock Exchange, was originally issued in 2004 with a seven year term.  

Focusing on the theme of ‘open,’ the 2010-11 Emirates Group Annual Report reflects on many of the Group’s successes that have ensured its continued profitability.

“Being open to competition, new ideas and most importantly the future, ensures that we stay ahead of the game. Knowing that we continue to delight our customers and motivate our employees is a true measure of our success,” continued Sheikh Ahmed.

“Looking ahead we have no plans to deviate from our proven strategy of investing in our business and focusing on core customer service. As we continue to grow, we are ambitious enough to believe that we can stimulate change in the aero political arena, for the benefit of the industry and the customers that it serves.”

Emirates Airline’s revenues grew by an outstanding 25 per cent from last year to reach AED 54.4 billion (US$ 14.8 billion). Airline profits of AED 5.4 billion (US$ 1.5 billion) marked an increase of 51.9 per cent over 2009-10’s profits of AED 3.5 billion (US$ 964 million).

Passenger Seat Factor, at 80 per cent, indicates the airline’s highest ever, a remarkable achievement given a substantial increase in seat capacity (Available Seat Kilometres – ASKMs) of 13 per cent. Overall capacity, measured in ATKM (Available Tonne Kilometres), rose 12.4 per cent to 32,057 million tonne-kilometres.

Passenger yield increased by 8.5 per cent to 28.3 fils per RPKM (Revenue Passenger Kilometre), up from 26.1 fils (seven US cents) in 2009-10.

During the year, in line with the airlines strategic growth plan, Emirates significantly increased its order for new aircraft, adding 32 additional Airbus A380s and 30 Boeing 777-300ERs. The combined value of these orders is US$ 13.4 billion and brings the airline’s total number of aircraft on order at the end of the financial year to 193, worth over US$ 66 billion. Emirates took delivery of eight new aircraft during the year including one Boeing 777-300ER and seven of the airline’s flagship A380s expanding the airline’s fleet size to a robust 148 aircraft. Emirates remains the world’s largest A380 and Boeing 777 operator with 15 A380s and 86 Boeing 777s.  Expanding its global footprint the airline launched passenger services to six new destinations – Amsterdam, Prague, Al Medinah al Munawarah, Madrid, Dakar and Basra – as well as increasing frequency and capacity to a number of high-demand cities across multiple markets, most notably the US, Asia, Middle East and Africa.

Emirates continues to benefit from a diverse revenue base, with no single region contributing more than 30 per cent of revenues. East Asia and Australasia led the way in 2010-11 with revenue growth of 30.9 per cent at AED 3.7 billion (US$ 1.0 billion), Europe followed closely with an increase of 24.3 percent at AED 2.8 billion (US$ 769 million) due primarily to three new passengers destinations commencing in the region and increased capacity through larger aircraft.

The Emirates A380 network was further developed during the year with three new destinations; Beijing, Hong Kong and Manchester as well as the highly anticipated re-introduction of the A380 service to New York.