Emirates Airline overcame the impact of a runway closure at Dubai International Airport to post an 8 per cent rise in first half-profit.
The rapidly expanding carrier also stands to benefit from a second half that looks likely to be defined by falling fuel prices
The airline reported net profit of Dh1.9 billion in the first six months.
Emirates said that fuel prices “only softened marginally” by the end of the six-month period. Fuel accounted for 38 per cent of Emirates’ operating costs during the six months, versus 39 per cent in the same period a year ago.
“Global fuel prices have been decreasing sharply lately, although it takes a bit of time to filter down to buyers from vendors, hence why Emirates has not seen a dramatic impact yet on fuel cost savings,” said Saj Ahmad, chief analyst at StrategicAero Research.
“That’ll be more prevalent in the second half of the year and will certainly bolster its cash position and eventual profitability.”
The expansion of Arabian Gulf carriers such as Emirates, Etihad Airways and Qatar Airways is gradually shifting the future of air travel to the region. The strategic location of Dubai and Abu Dhabi is another advantage, where almost 80 per cent of the world’s population lying within eight to 10 hours’ flying time from the two emirates.
Emirates highlighted the impact of a temporary grounding of part of its fleet owing to runway closures in the summer as well as “a strong US dollar against other major currencies impacting revenues”.
Runway repairs started on May 1 and lasted about 80 days, which led to an estimated Dh1bn hit to revenues for the duration of the repairs.
Sheikh Ahmed bin Saeed Al Maktoum, the chairman and chief executive of the carrier also pointed to potential headwinds facing the industry – including global economic malaise, Ebola, currency fluctuations and regional conflict.
“These issues appear to be piling up, impacting commercial aviation and travel, but show no signs of speedy resolution,” he said.
Emirates suspended a number of routes during the six-month period such as Kiev, Tripoli, Sana’a, Erbil and Conakry.
Revenue for the airline was up 11 per cent for the period on the back of stronger passenger and cargo demand. Emirates’ revenue for the six months was Dh44.2bn, compared to Dh39.8bn in the same period a year ago.
Emirates flew to 146 destinations in 83 countries by the end of September, up from 137 cities in 77 countries a year ago. The airline carried 23.3 million passengers during the period, up 8 per cent from 2013.
The wider Emirates Group profit increased by 1 per cent to Dh2.2bn as the runway closures proved a drag on its dnata ground handling and services unit.
Profit for dnata dropped by 26 per cent to Dh339m on the back of both the runway repairs and the costs incurred in setting up handling operations at Dubai World Central.
By the end of September, the group’s cash position was Dh16.1bn, compared to Dh19bn at the end of March.
“This is due to ongoing investments mainly into new aircraft and other airline-related infrastructure projects,” the airline said.
selgazzar@thenational.ae
Follow The National's Business section on Twitter