Emirates Group just posted its performance for the first half of 2019-2020. and Emirates Airlines’ numbers have been the star of the show, with stellar results.
Emirates Airlines Highlights: Revenue down 3% to AED 47.3 billion ($12.9 billion), and profit increase of 282% to AED 862 million ($235 million). Improved seat load factor of 81.1%, up 2.3% pts, with 29.6 million passengers carried. Dubai’s strong attraction as a destination sees the airline carrying 7.9% more customers to its hub city compared to same period last year.
In the first half of the 2019-20 financial year, Emirates net profit was AED 862 million ($235 million), up 282%, compared to last year. Emirates revenue, including other operating income, of AED 47.3 billion ($12.9 billion) was down 3% compared with the AED 48.9 billion ($13.3 billion) recorded during the same period last year. This result was driven by increased agility in capacity deployment, with healthy customer demand for Emirates’ products driving improved seat load factors and better margins.
“Emirates airline reporting an outstanding 282% jump in half-year profit certainly makes an encouraging announcement and suggests that the airline is not suffering from a slowdown,” Lukman Otunuga, Senior Research analyst at ForexTime (FXTM), told AMEinfo. “Given how global growth concerns and prolonged US-China trade disputes have fuelled pessimism throughout many industries, Emirates is certainly a bright spot for the Aviation sector.”
“The lower fuel cost was a welcome respite as we saw our fuel bill drop by AED 2.0 billion compared to the same period last year,” Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said.”
Emirates operating costs shrunk by 8% against the overall capacity decrease of 7%. On average, fuel costs were 13% lower compared to the same period last year. This was largely due to a decrease in oil prices (down 9% compared to same period last year), as well as a lower fuel uplift due to reduced capacity during 45-day runway closure at DXB. Fuel remained the largest component of the airline’s cost, accounting for 32% of operating costs compared with 33% in the first six months of last year.
“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins, Sheikh Al Maktoum said.
“Concerns over decelerating global growth remains a major theme and should not be underestimated,” Otunuga explains. “Geopolitical risk factors continue to threaten the global macroeconomic landscape with major institutions downgrading their growth forecasts. The IMF recently revised growth forecast for the GCC region and the many revisions lower for the global economy that have been heard across the likes of the IMF, World Bank, OECD, World Trade Organization plus central bank policymakers throughout the year.”
“While Emirates’ impressive profits suggest that the airline is dealing with global headwinds robustly, the backdrop of global economic challenges will need to be closely monitored throughout several industries for some time to come yet.”
In the first six months of its financial year, Emirates added two new passenger routes: Dubai-Bangkok-Phnom Penh, and Dubai-Porto (Portugal). As of 30 September, Emirates’ global network spanned 158 destinations in 84 countries. Its fleet stood at 267 aircraft including freighters.
Emirates also further developed its partnership with flydubai. Both airlines continued to leverage their complementary networks to optimise flight schedules and offer new city-pair connections through Dubai, as well as open new routes including Naples (Italy) and Tashkent (Uzbekistan) in the first half of 2019-20. Passengers connecting between Emirates and flydubai can experience seamless transits with 22 flydubai flights now operating from Emirates Terminal 3 at DXB.
Overall capacity during the first six months of the year declined by 7% to 29.7 billion Available Tonne Kilometres (ATKM) mainly due to the DXB runway closure and reduction in fleet during this 45-day period. Capacity measured in Available Seat Kilometres (ASKM), shrunk by 5%, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was down by 2% with average Passenger Seat Factor rising to 81.1%, compared with last year’s 78.8%.
Emirates carried 29.6 million passengers between 1 April and 30 September 2019, down 2% from the same period last year, however, passenger yield increased by 1% period-on-period. The volume of cargo uplifted at 1.2 million tonnes has decreased by 8% while yield declined by 3%. This reflects the tough business environment for air freight in the context of global trade tensions and unrest in some key cargo markets.