Emirates Airlines posts mammoth profits.

[Imran K. 0]

Source: GulfNews.com

 

(Important parts are bolded)

 

High fuel prices eat into profitability

 

By Saifur Rahman, Busiess News Editor

 

 

Dubai: High fuel bills have taken their toll on Emirates Group's profitability.

 

The airline yesterday announced a 4.9 per cent increase in net profits to Dh2.8 billion ($762 million) for the financial year ended March 31, compared to the previous year's Dh2.7 billion ($726 million).

 

Emirates Group last year reported a record 49 per cent jump in net profits.

The airline carried nearly 14.5 million passengers, up two million or 16 per cent over the previous year's 12.5 million passengers. At the same time 16 new aircraft were added to the fleet, the airline said.

 

Fuel costs represented Dh5.44 billion, or 27.2 per cent of the airline's operating expenses last year, up 27.10 per cent over the previous year's Dh3.27 billion.

 

The airline's jet fuel risk management programme helped mitigate fuel costs, saving the company $189 million in 2005-06, 50 per cent more than the previous year, the airline said in a statement. The outlook however, remains sombre in a volatile global market where oil prices have hit new highs.

 

"It has been another tough year with pressure from fuel costs continuously dampening our robust net income production. Emirates has returned its 18th consecutive annual profit, and we are pleased to have achieved this solid performance while expanding our operations in an increasingly competitive environment," Shaikh Ahmad bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, told the media while announcing the results.

 

He said Emirates budgeted fuel at $65 per barrel, well below the current market price.

 

Strong cash balance

 

Like other airlines, Emirates was forced to increase fuel surcharges on tickets, which only covered 41 per cent of incremental costs.

 

Despite this, group revenue increased by Dh5.2 billion ($1.4 billion) or 27 per cent to Dh24.3 billion ($6.6 billion) compared to Dh19.1 billion ($5.2 billion) the previous year, offset by costs which rose 31 per cent, reducing its operating profits to a mere 2.9 per cent.

 

The Group's cash balance was a robust Dh11 billion at the end of March, an improvement of 28.6 per cent over the year earlier.

 

"These results clearly show that Emirates' customer-oriented approach and investments in providing a quality product the best aircraft that money can buy, top-flight service and travel experience at a competitive price has paid off in terms of retaining and winning new customers globally," he said.

 

For 2005-06, Emirates will pay an increased dividend of Dh386 million to its owner, the Government of Dubai, compared to Dh368 million last year. In total, the ownership will have received Dh1.4 billion from Emirates since the financial year 2000-01.

 

Shaikh Ahmad rejected accusations that Emirates receives hidden government support and subsidies, reiterating that the company's success is based on a sound and simple business model, which focuses on growth and investing in innovations to keep ahead of the competition.

 

"Profitability through growth seems to have become a theme of Emirates for the past decade," he said.

 

"I must stress that we have never set out to be a threat to any other airline. We have simply concentrated on trying to provide a superb service for our passengers and cargo customers."

 

Emirates revenues totalled Dh23.1 billion for the year, Dh4.9 billion or 27 per cent above income of Dh18.1 billion in 2004-05. Airline profits of Dh2.5 billion also topped the previous year's record profits of Dh2.4 billion.

With the addition of 16 new aircraft during the financial year, the Emirates fleet reached 91 at the end of March. The current fleet (April 2006) comprises 92 aircraft 83 wide-bodied passenger aircraft and nine freighters.

 

The airline forecasts that its fleet will comprise 156 aircraft by 2010, serving 101 destinations and carrying some 26 million passengers.

 

Emirates launched services to eight new cities in 2005-06 Alexandria, Abidjan, Addis Ababa, Hamburg, Kolkata, Thiruvananthapuram, Seoul and Lilongwe (cargo only) bringing the network total to 83 destinations, five of them cargo-only.

The passenger seat factor increased to 75.9 per cent, up 1.3 percentage points from the previous year, led by an increase in traffic by 20.2 per cent and keeping pace with a capacity increase of 18.9 per cent to 15,803 million tonne-kilometres.

 

Rapid traffic growth

 

Emirates SkyCargo handled over one million tonnes of freight carried, up more than 180,000 tonnes, or 21.5 per cent from the previous year's 838,400 tonnes.

 

The cargo division's revenues of Dh4.5 billion were Dh1 billion or 29.2 per cent higher than the year before, and contributed 21 per cent to the airline's transport revenue.

 

Dnata recorded strong performance with revenue growth of 25.9 per cent to Dh1.8 billion, compared to Dh1.4 billion last year. Dnata's profits of Dh324 million represent an increase of Dh64 million or 24.6 per cent compared to the previous year's Dh260 million.

 

In its 48 years of operation, Dnata remains at the heart of the rapid traffic growth at Dubai International Airport, handling a record 203,000 aircraft movements and 1.3 million tonnes of cargo during the 2005-2006 fiscal year.

 

As of March 31, the group employed 26,906 people, up nine per cent from a year before, including 1,350 captains and first officers.

In the past 12 months, Emirates has been receiving 60 new cabin crew recruits each week, and now has over 6,000 cabin crew representing more than 100 nationalities.

 

The group's Facilities Management Department currently manages Dh5.1 billion ($1.4 billion) worth of projects in Dubai under various stages of design and construction.

 

A true success story...

 

This means....

 

BONUS!!!! AMS HERE I COME!

 

There you go..something more visual!

 

Emirates Airlines' Business Statistics

[Radzi 2]

Do they have enough people to fly and maintain the fleet?

[Seth K 3]

Do they have enough people to fly and maintain the fleet?

 

Import people ler

Isn't this thread bout this already up?

 

In the past 12 months, Emirates has been receiving 60 new cabin crew recruits each week, and now has over 6,000 cabin crew representing more than 100 nationalities.

 

Want to see varieties of Ah Moi, fly Emirates.........................

[Imran K. 0]

Do they have enough people to fly and maintain the fleet?

 

It's apparent to me that they are having no problems recruiting pilots as day after day, new batches are either in Dubai for their interviews or are going through their induction training.

 

Maintennance of the fleet seems to be covered quite well, atlhough there has been a SIGNIFICANT increase in the workload of both engineers and mechanics alike due to their exponential growth. For example...in 1998, an LAE would expect to handle about 3 EK aircrafts, and 2 'contract' aircrafts over the 12 hours shift. Now, in 2006, an LAE would be expected to handle about 9 EK aircrafts, and 5 'contract' aircrafts over the 12 hours shift.

 

Nontheless, EK compensates their workforce very well in terms of a great starting salary couple with numerous fringe benefits.

 

They are continuously hiring so for those who are interested, visit www.emiratesgroupcareers.com for further information.

 

(P/S: Referral fee of 1x milo ais applies eh... )

Edited April 27, 2006 by Imran K.

[Keith T 2]

Here's yet another Emirates (and Dubai) article in the Australian. Imran will love this.

 

http://www.theaustralian.news.com.au/story...1-23349,00.html

[Seth K 3]

From comman knowledge, isn't MH bigger than EK as today.......???

[Imran K. 0]

From comman knowledge, isn't MH bigger than EK as today.......???

 

Just goes to show, size doesnt determine profitability.

[Keith T 2]

Just goes to show, size doesnt determine profitability.

 

Seconded - UA's the 2nd biggest airline in the world, yet it filed chapter 11.

[Seth K 3]

So, but MH still bigger than EK....right?

[Isaac 0]

Seconded - UA's the 2nd biggest airline in the world, yet it filed chapter 11.

I believe UA is no longer the 2nd biggest now.

 

So, but MH still bigger than EK....right?

Yes. In terms of fleet size.

 

 

 

[Keith T 2]

I believe UA is no longer the 2nd biggest now.

 

Not sure what it is post-Chapter 11. Once the darling of the American aviation industry, it sure is a sickly bird now. The last I read was AA's the biggest airline in the world in terms of fleet size, followed by UA. But UA has more RPK and more international presence than AA.

 

Yeah MH is one of the biggest airlines in terms of fleet size, definitely the biggest in South East Asia. We'll see how that changes under the restructuring.

 

 

[Seth K 3]

United file the Biggest Airline banckruptcy.........AF-KLM is the biggest airline..............follow by American then..............

May be MH is the biggest, but in term of seats number, MH can't be on top.

EK has ambition to be the biggest airline but I really doubt that......doubt they can beat AF-KLM, AA-UA-DL-CO with mass number of planes, omg-all the best to Imran n co.

 

 

[Keith T 2]

United file the Biggest Airline banckruptcy.........AF-KLM is the biggest airline..............follow by American then..............

May be MH is the biggest, but in term of seats number, MH can't be on top.

EK has ambition to be the biggest airline but I really doubt that......doubt they can beat AF-KLM, AA-UA-DL-CO with mass number of planes, omg-all the best to Imran n co.

 

You don't have to be the biggest airline in terms of fleet size to be the 'biggest airline.' If that made any sense. I think EK means it wants to be the 'biggest airline' in terms of profits, market penetration, value etc.

[Imran K. 0]

Hmm...what IS the best way to determine the size of a business? In terms of employee numbers? Value of products? Profitability?

 

There isn't one "cast in stone" way in which one can determine the size of any business. A combination of a few must be taken into consideration.

 

In terms of employees, MAS is 'bigger' than Emirates Airlines...but nowhere near the size of Emirates Group.

 

In terms of value of products, Emirates Airlines/Group shadows MAS...

 

In terms of profitability, lol..you be the judge of that

 

 

P/S: Seth, the first step towards greatness, is ambition.

[Seth K 3]

Fair enough, everyone has their points

 

P/S: Seth, the first step towards greatness, is ambition.

100% Agree!

Edited April 30, 2006 by Seth K

[Isaac 0]

May be MH is the biggest, but in term of seats number, MH can't be on top.

TG is the biggest Southeast Asian carrier in terms of passengers carried for several years now follow by SQ, MH.

 

 

I think EK means it wants to be the 'biggest airline' in terms of profits, market penetration, value etc.

We'll see if their dream can come true ...... Their growth rate is exactly the same as UA, AA, NW, CO in the 70s till 90s.

 

[Imran K. 0]

I have no doubt they will succeed in fulfilling their dreams. Go EK!

[Colin Kok 0]

Hi Imran,

 

Good for EK man.

 

Is it true the rumour that I heard many EK Capts leaving or have left for greener pastures.

 

Appreciate the info.

 

Colin

 

 

[Imran K. 0]

Hi Imran,

 

Good for EK man.

 

Is it true the rumour that I heard many EK Capts leaving or have left for greener pastures.

 

Appreciate the info.

 

Colin

 

Hehe..got la a few...

 

My "contacts" are out of town for a while..will get more info soon. Unless you know something I dont...

[Bing Chu 0]

..... many EK Capts leaving or have left for greener pastures .....

Why was I under the impression the desert happens to be the definitive green pasture as far as pilot remuneration is concerned ?!

[Imran K. 0]

Why was I under the impression the desert happens to be the definitive green pasture as far as pilot remuneration is concerned ?!

 

As far as pilot remuneration is concerned, Emirates and possibly even Korean Airlines are definitely one of the greener pastures in the Aviation Industry. However, there are quite a few pilots (mat salleh's mostly) who are not happy with the politics of the company along with the general lifestyle of Dubai.

 

I dont blame them...what's the point of partying the night away when you cant drink a sip of alcohol for fears of being caught "drunk driving"?

 

 

[Bing Chu 0]

Aiya, the issue of "drunk driving" is universal throughout the world lah - whether you're driving your car home from Kuala Langsat or bringing the Hibiscus into KUL from LHR, if you're tipsy, you're over the limit !! BTW, is Dubai dry like in Brunei ?

[Imran K. 0]

Aiya, the issue of "drunk driving" is universal throughout the world lah - whether you're driving your car home from Kuala Langsat or bringing the Hibiscus into KUL from LHR, if you're tipsy, you're over the limit !! BTW, is Dubai dry like in Brunei ?

 

Sir..

 

Im not talking about "drunk driving"...

 

Im talking about having alcohol in your system and driving. As in, if the cops stop you and you test positive for alcohol (whether being drunk or not), you are jailed for a day and will be fined.

 

Some country eh...

 

P/S: If you're NOT driving, you can be as drunk as you want.

[Pieter C. 5]

BONUS!!!! AMS HERE I COME!

 

PM me with the arrival- and departure details, please !!!

Will be glad and honoured to show you around

[Bing Chu 0]

Im not talking about "drunk driving"...

Haiyah, stop confusing the elderly lah - one post say this, next post say another !!

 

My current understanding - in Dubai, drunk driving means having even the slightest trace of alcohol detected if and when tested. Correct ?

 

In most countries (Malaysia included) - drunk driving legally means having alcohol level above specified concentration in blood, value extrapolated from concentration of alcohol in one's breath normally.