Emirates Group brings Dh1bn gain for Investment Corporation of Dubai
Investment Corporation of Dubai (ICD) has netted a Dh1 billion windfall from Emirates Group after its profits grew by almost a third.
The dividend is similar to the one paid in the previous financial year, Emirates Group said.
Dubai’s main carrier, Emirates Airline, reported a 43 per cent increase in profit as it added more passengers and fuel prices fell.
Emirates net profit last year was Dh3.3bn compared with Dh2.3bn in 2012. The airline carried 44.5 million passengers during the year, up 13 per cent from 2012. Emirates’ bottom line was previously hit by high jet fuel prices that have since eased.
Emirates is part of ICD, one of the big three government-related holding companies in the emirate. ICD generated revenue of US$43.8bn in 2012, the Financial Times reported yesterday, citing a prospectus for a planned $750 million Islamic bond. It also holds stakes in Emaar Properties and Emirates NBD.
Emirates flies to 142 destinations in 80 countries. The airline’s revenue grew 13 per cent to Dh82.6bn during the period.
“The airline has managed to suppress costs with newer fuel efficient airplanes that have contributed to keeping rising fuel bills to just 10 per cent of overall costs,” said Saj Ahmad, the chief analyst at StrategicAero Research.
Emirates made headlines at the Dubai Airshow in November when it ordered $99bn worth of aircraft – including 150 Boeing 777X and 50 Airbus A380s. It already has 217 aircraft in its fleet.
The wider Emirates Group profit increased by 32 per cent to Dh4.1bn. It made a Dh22bn investment last year, its largest ever, to fund expansion and improve goods and services.
Emirates SkyCargo, the group’s air freight division, reported a 7.9 per cent increase in volumes last year. The division moved its operations on May 1 to Al Maktoum International Airport at Dubai World Central. The airline, however, was unlikely to do the same with its passenger flights until the early 2020s, said Paul Griffiths, the chief executive of Dubai Airports.
But Mr Ahmad said that Emirates would “obviously have to look harder and sooner at the need to relocate to Al Maktoum International Airport so that it can benefit from the slot and space availability at the new airport and consider the possibility of de-risking its operations by splitting flights between the two airports”.
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 lies eight to 10 hours’ flying time from the two emirates.
Revenue at dnata, the group’s airline services unit, grew to Dh7.6bn last year, up 14 per cent on last year. Profit increased 1.2 per cent to Dh829m.
In March last year, Emirates announced a partnership with the struggling Australian airline Qantas. In February, it signed a codeshare agreement with Jetstar, Qantas’s low-cost unit. The deal gives it access to new destinations in Australia, New Zealand and Asia.
“The partnership with Qantas wasn’t just good for the airline; it was good for the airport as more passengers are stopping by Dubai and the airport duty free,” said Sheikh Ahmed bin Saeed Al Maktoum, the Emirates chairman.
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Published: May 8, 2014 04:00 AM