Emirates, the world's largest long-haul airline, posted a record first-half profit in its current financial year as it ramped up capacity to meet strong international travel demand.
The airline is optimistic about the next six months while monitoring headwinds, including higher fuel prices and geopolitics.
Its profit stood at Dh9.4 billion ($2.6 billion) in the April to September period, up 135 per cent from the same period last year, on a boost in passenger numbers, Emirates said on Thursday.
Revenue grew by 19 per cent, year on year, to Dh59.5 billion as the airline carried 26.1 million passengers in the first half, up 31 per cent from the same period last year.
“We are seeing the fruition of our plans to return stronger and better from the dark days of the [Covid-19] pandemic,” said Sheikh Ahmed bin Saeed, chairman and chief executive of Emirates Airline and Group.
“Across the group, we’ve continued to ramp up operations safely and move nimbly to meet customer demand. We’ve implemented a series of service and product enhancements to win customer preference, and we’ll continue to invest in our people, products, partnerships and technology to strengthen our capabilities and ensure we are future ready.”
The record profit comes at a time when the airline is benefitting from robust demand for long-haul travel during the peak summer season.
To meet this demand, the airline ramped up capacity in the first half of the financial year by resuming its Airbus A380 operations to Bali, Beijing, Birmingham, Casablanca, Nice, Shanghai and Taiwan.
In July, it launched daily non-stop services to Montreal, a new destination, and its second destination in Canada.
The number of the international visitors to Dubai exceeded the pre-pandemic level in the first half of this year as the emirate's hospitality and tourism sector posted a record performance.
International visits to Dubai rose by 20 per cent on an annual basis during the first half of the year, the Dubai Media Office said in August.
The state-owned airline increased its overall capacity during the first six months of the year by 25 per cent to 28.5 billion available tonne kilometres due to an expanded flight programme.
Capacity measured in available seat kilometres increased by 30 per cent, year on year.
The airline filled 81.5 per cent of its available seats in the first half of the financial year, up from passenger seat factor of 78.5 per cent during the same period last year.
Overall direct operating costs, including fuel, rose by 9 per cent due to an increase in operations.
Fuel accounted for 34 per cent of the airline’s operating costs but was slightly lower that the 38 per cent recorded in the same period last year.
Earnings before interest, taxes, depreciation and amortisation grew 33 per cent to Dh19.5 billion.
Record group profit
Emirates Group, which includes global airport services company Dnata, posted a record profit of Dh10.1 billion, up from Dh4.2 billion during the same period last year.
Group-wide revenue rose by 20 per cent to Dh67.3 billion.
The Emirates Group also grew its workforce to 108,996 as of September 30, up 6 per cent from March 31, and has continuing recruitment drives.
“The group has surpassed previous records to report our best-ever half-year performance. Our profit for the first six months of 2023-2024 has nearly matched our record full year profit in 2022-2023,” Sheikh Ahmed said.
The results highlight “the strength of our business model and [the] power of Dubai’s vision and policies that has enabled the creation of a strong, resilient and progressive aviation sector”, he added.
Dnata's profit jumped threefold, year on year, to Dh709 million on the back of a 27 per cent increase in revenue to Dh9.3 billion as operations strengthened across its cargo, ground-handling, catering, retail and travel services units.
The profit increase defied “lingering operational challenges” in many markets, such as a shortage of skilled workers, supply chain issues and inflationary pressures.
Looking ahead, Emirates expects travel demand to remain strong and is monitoring headwinds facing the aviation industry.
“For the second half of 2023 to 2024, we expect customer demand across our business divisions to remain healthy and we will stay agile in how we deploy our resources in this dynamic marketplace,” Sheikh Ahmed said.
“At the same time, we are keeping a close watch on headwinds such as rising fuel prices, the strengthening US dollar, inflationary costs and geopolitics.”
Emirates is among several global airlines that have temporarily suspended flights to Tel Aviv amid the Israel-Gaza war. Flights are currently suspended until the end of November.
Global airlines are also facing mounting economic uncertainty amid the rise in cost of living that could pressure demand for air travel.