Emirates’ profits fall on ‘crippling’ fuel costs
Emirates, the Dubai based airline, is still making huge profits. However, its profit for 2011/12 was $629 million, down from $1.6 billion in the previous year. Emirates says th is is due to fuel costs. The airline transported about 31.4 million passengers in 2010, and says this was up to about 34 million passengers in 2011. Wikipedia data look as if Emirates is the global airline with the highest level of passenger kilometers, implying it does particularly long haul routes. Which would explain why their fuel bill was $6.6 billion last year. But Delta Air Lines’ fuel bill was approaching $12 billion.
Emirates Group has seen its profits fall by 60% due to the “crippling cost of fuel” despite record-breaking revenue across its businesses.
The Dubai-based company, which includes the Emirates airline, made a net profit of $629 million for the 2011/12 financial year which runs to the end of March – down from $1.6 billion in the previous year.
This was despite group revenue rising by 17.8% to $18.4 billion during the previous year.
The airline saw its profits fall by 72% to $409 million in 2011/12 as it was hit by a 44.4% rise its fuel bill to $6.6 billion over the year. [Delta Air Lines’ fuel bill was around $12 billion in 2011 link ]
The rise in fuel costs was partially offset by a 14.5% increase in revenue to $17 billion at airline which broke through the 34-million passenger barrier for the first time.
“Emirates bore the brunt of the crippling cost of fuel for nearly one year, before reluctantly introducing a fuel surcharge on all tickets,” said the company in a statement.
Sheikh Ahmed bin Saeed Al Maktoum, chief executive of Emirates Airline and Group, said the airline had recorded its 24th consecutive year of profit despite this increase in costs.
“Maintaining an upward growth trajectory is an achievement that belies the industry norm,” he added.
“Throughout the 2011/12 financial year, the group has collectively invested close to $3.8 billion) in new products. This investment has garnered new customers and increased our international presence.
“Successful business growth is not a matter of luck, it is the result of sustained and calculated investment. Every dirham that we earn is strategically ploughed back into our business and it is this foresight that has allowed the group to maintain such strong and consistent profitability.”
Emirates Group also includes air services provider Dnata which purchased UK online leisure travel agency Travel Republic earlier this year.
In the financial year 2010/2011, Emirates carried 31.4 million passengers and 1.8 million tonnes of cargo.
Emirates is not in the top 10 airlines, by the number of passengers flown in 2010. But strangely it comes out as the top airline for international passenger kilometers, indicating that its flights are all very long haul.
Scheduled international passenger-kilometers flown
|3||Delta Air Lines||119,055||70,725|
|5||British Airways Aer Lingus||103,095||109,402||113,075|
Scheduled domestic passenger-kilometers flown
|1||Delta Air Lines||147,935||91,179||97,923||103,008|
|4||China Southern Airlines1||95,609||81,850||71,584||69,367|
|9||China Eastern Airlines||49,959||43,922||–|
Scheduled passengers carried
|1||Delta Air Lines||163,838,348||162,614,714||161,049,000||106,070,000||72,900,000||73,584,000||86,007,000|||
|6||China Southern Airlines||80,674,800||76,500,000||66,280,000||57,961,000||56,900,000||48,512,000||43,228,000|||
|7||Ryanair Aer lingus 2||76,400,000||80,553,580||66,503,999||58,565,663||50,931,723||42,509,112||34,768,813|||
|9||China Eastern Airlines||–||64,877,800||44,042,990||37,231,480||39,161,400||35,039,700||24,290,500|||
|10||US Airways British Airways||60,854,368||59,809,367||58,921,521||62,659,842||66,056,374||66,102,774||71,580,012|||