Emirates posts $2.4 billion first-half profit in UAE's first corporate tax year

Customer demand to remain strong in 2024 and 2025, chairman Sheikh Ahmed bin Saeed says

An Emirates Airbus A380 aircraft. The airline has so far recovered about 95 per cent of its pre-Covid network size. AFP

Emirates, the world's biggest long-haul airline, posted a first-half profit after tax of Dh8.7 billion ($2.4 billion) in the first financial year that the UAE corporate income tax is applied to the company.

This is 7 per cent below the Dh9.4 billion post-tax profit the airline recorded during the first six months of its financial year from April to September. The figures for September 2024 and September 2023 are not directly comparable, given that it's the first fiscal year that the UAE corporate income tax of 9 per cent applies to Emirates' financial reporting, it said on Thursday.

The Dubai-based airline's profit before tax reached a record of Dh9.7 billion in the April to September period, compared to Dh9.5 billion for the same time a year ago, reflecting strong travel and air cargo demand across its markets, Emirates said.

The airline's revenue rose five per cent year-on-year to a record Dh62.2 billion.

“We expect customer demand to remain strong for the rest of 2024-25, and we look forward to increasing our capacity to grow revenues as new aircraft join the Emirates fleet and new facilities come online at dnata,” Sheikh Ahmed bin Saeed, chairman and chief executive of Emirates airline and group, said.

“The outlook is positive, but we don’t intend to rest on our laurels. We will stay agile in deploying our capacity and resources in a dynamic marketplace.”

Emirates recorded strong travel demand in the first six months of its fiscal year, despite the Israel-Gaza war.

Like many other airlines, Emirates flights to Israel, Lebanon, Iraq, Jordan and Iran have been impacted by the Gaza war and Israeli attacks on Lebanon.

However, in the first half of the year, Emirates increased flights to eight cities: Amsterdam, Cebu, Clark, Luanda, Lyon, Madrid, Manila and Singapore. It also opened new routes to Bogota through Miami in June and Madagascar through Seychelles in September.

Dubai International Airport, Emirates' home base, in the first six months of this year handled a record 44.9 million people, up 8 per cent on the same period of 2023.

Emirates carried 26.9 million passengers between April and September, up 3 per cent from the same period last year. Capacity, measured in Available Seat Kilometres (ASKM), increased by 4 per cent.

Load factor, a measure of how well an airline fills available seats with paying passengers, dipped to 80 per cent in the first half of the financial year from 81.5 per cent the previous year.

The airline's direct operating costs, including fuel, rose by 6 per cent in line with increased operations, it said.

Fuel remains the largest component of the operating cost, at 32 per cent, compared to 34 per cent in the same period last year, it said.

Emirates' freight arm, SkyCargo, carried nearly 1.2 million tonnes in the first six months, up 16 per cent compared on the same period last year, with “notable volume contributions from strong Chinese e-commerce traffic, and a rise in shipments bound for Dubai”, it said.

Emirates group, which includes global airport services company Dnata, recorded post-tax profit of Dh 9.3 billion, after accounting for the 9 per cent tax charge, it said.

The group's pre-tax profit rose one per cent year-on-year to a record Dh10.4 billion in the April to September period.

Group revenue rose five per cent to a record Dh70.8 billion, reflecting “consistently strong” customer demand across business divisions and across regions it operates it, Emirates said.

“This again illustrates the power of our proven business model working in combination with Dubai's growth trajectory as a city of choice to live, work, visit, connect through and do business in,” Sheikh Ahmed said.

The group closed the six months with a cash position of Dh43.7 billion on September 30, down from Dh47.1 billion in March.

“The group has been able to tap on its own strong cash reserves to support business needs, including payments for new freighter aircraft orders and other debt payments,” it said.

The group also paid Dh2 billion in dividends to its Dubai government owner, as previously disclosed at the end of its 2023-2024 financial year.

The group’s workforce grew 3 per cent year-on-year to 114,610 as of September 30.

Dnata, the group's global airport services unit, recorded a 19 per cent drop in profit after tax of Dh571 million. Pre-tax profit declined 5 per cent to Dh720 million, mainly due to a one-off impairment charge of Dh152 million, the airline said.