Emirates profit tumbles to lowest in a decade as fuel prices bite

Emirates hub is at Dubai International Airport. Photo / AP

Emirates airline's profit slumped 69 per cent in the last year to US$237 million ($359m) despite record revenue.

The airline is the biggest long-haul carrier and was hit by higher fuel prices and slowing demand in the Middle East.

Although the 31st successive year of profit, it was the lowest since 2009. Chairman and chief executive of Emirates Airline and Group, Sheikh Ahmed bin Saeed Al Maktoum, said the 2018-19 financial year had been tough.

"Our performance was not as strong as we would have liked. Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets."

The increase in global airfreight demand from the previous year appeared to have gone into reverse. Emirates had seen travel demand weaken, particularly in its own region, impacting both the airline and data, its ground handling, cargo, travel, and flight catering services subsidiary.

Other airlines had been affected in the region. In March this year, Abu Dhabi-based carrier Etihad announced an annual loss of US$1.28 billion ($1.8b), its third successive loss prompting speculation if it could be a takeover target for Emirates. Qatar Airways, which has been hit by a blockade by regional neighbours is also facing financial headwinds.

Sheikh Ahmed said during the past year it had cut spending by slowing the recruitment of non-operational roles, and implementing new technology systems and new work structures to improve productivity.

"It's hard to predict the year ahead, but both Emirates and dnata are well positioned to navigate speed bumps, as well as to compete and succeed in the global
marketplace.''

Across its more than 120 subsidiaries, the Group's total workforce increased by 2 per cent to 105,286.

Group revenue reached US$29.8b, an increase of 7 per cent over last year's results.
Emirates' total passenger and cargo capacity crossed the 63b kilometre mark, cementing its position as the world's largest international carrier.

The airline said it had "moderately" increased capacity during the year over 2017-18 by 3 per cent, with a focus on yield improvement.

Emirates took delivery of 13 new aircraft during the financial year, comprising seven A380s and six Boeing 777-300ERs, including the last 777-300ER on its order book. The next 777 delivery is planned for 2020, when it gets the first of the new generation 777X aircraft.

The airline flies daily Auckland-Dubai services as well as flights through Bali. It also flies from Christchurch to Dubai daily via Australia.