Emirates airline posts 82.5 pct drop in 2016-17 profit

Emirates plane taxis to a gate at Dubai International Airport at Dubai International Airport in Dubai United Arab Emirates. Emirates Group which operates the Middle East's largest airline said in a report

Emirates plane taxis to a gate at Dubai International Airport at Dubai International Airport in Dubai United Arab Emirates. Emirates Group which operates the Middle East's largest airline said in a report

"Over the years, we have invested to build our business capabilities and brand reputation". The company's chief, Sheikh Ahmed bin Saeed al-Maktoum noted events including Brexit, a series of terrorist attacks suffered by European countries and United States travel restrictions from Middle East countries as having an overall negative impact on air travel.

Looking ahead, CEO Sheikh Ahmed bin Saeed Al Maktoum warned that the carrier faced a "volatile business climate and fast changing consumer expectations ... with hyper competition squeezing airline yields".

In its report released Thursday, the airline said profits were affected by a turbulent year, including heightened immigration concerns, terror attacks in several European cities, an attempted military coup in Turkey and uncertainty caused by Britain's vote to leave the European Union. "They will need to continue to invest because always in the aviation industry we have peaks and troughs- and Emirates in the past have shown to be incredibly wily and buying airplanes in a trough". We will also progress on our digital transformation journey.

"Our future business will be digitally integrated into the ecosystem of partners, suppliers and in particular with Dubai, offer more personalised customer experiences, and be enabled by a new suite of the latest technologies including automation, robotics and biometrics", said Sheikh Ahmed. "Our aim is to deliver more personalised customer experiences, and seamless customer journeys, and make our operations and back-office functions even more efficient". The group increased the number of employees 11 percent to over 105,000.

Emirates carried some 56 million passengers in 2016-2017 compared to 52 million passengers the previous year. During the year, the carrier took delivery of a record 35 new aircraft (19 A380s and 16 Boeing 777-300Ers), as 27 older aircraft were retired from service. The industry average is 140 months.

Emirates' overall capacity grew seven per cent, supporting the launch of six new global destinations, as well as the enhancement of services with bigger aircraft or additional flights to existing destinations.

Nevertheless, Emirates managed to keep its revenue stable at $23.2 billion, despite the effect of what it called the relentless rise of the USA dollar against currencies in most of its key markets.

Emirates Group, which includes the airline and ground handling unit dnata, reported a 70 per cent year-on-year drop in profit for the financial year ending March 31 as it grapples with lower air fares resulting from excess capacity and soft travel demand in many markets.

Its fuel bill increased 6 per cent on the year to Dhs21bn and made up 25 per cent of its operating costs compared with 26 per cent last year. The average price of jet fuel fell slightly during the financial year.

Emirates SkyCargo contributed US$2.9 billion or 13 percent of the airline's total transport revenue, a decline of five percent year-on-year, as yield fell eight percent and tonnage flown increased three percent to 2.6 million.

Emirates' hotels recorded revenue of Dh738 million ($200.8 million), an increase of 5 per cent over previous year in a highly competitive market mainly in the UAE.

These deals align with Emirates' strategy to seek diverse financing sources, and underscore its sound financials and the strong investor confidence in the airline's business model.

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