Emirates Airline annual profits surge 40 percent to $1.2 billion

Dubai's Emirates Airline said Thursday annual profits have surged 40 percent to $1.2 billion as revenues increased and fuel costs dropped. The Middle East's largest carrier said revenues rose seven percent to $24.2 billion with passenger numbers up 11 percent to 49.3 million in the financial year 2014-15. Emirates chief executive officer Sheikh Ahmed bin Saeed al-Maktoum said the profit was achieved "despite a tough market and stiff competition."
The company said a significant drop in the price of jet fuel had reduced operating costs by seven percent to $7.8 billion. Fuel represented 35 percent of operating costs, down from 39 percent the previous year.
The Emirates chief described the drop in oil prices as a "welcome relief" that impacted the second half of the financial year. A global supply glut has eroded oil prices by around 60 percent since last year. Emirates said it faced challenges including a weaker US dollar, to which the UAE dirham is pegged, as well as an 80-day runway closure at its hub for upgrading.
Sheikh Ahmed also spoke of the challenge from competitors, alluding to US carriers pushing Washington to take action against fast-growing Gulf carriers over alleged state subsidies. "Our competitors challenge us everyday and some are lobbying their government to restrict us," he said in a clear reference to big US carriers - Delta, United and American Airlines.
The carriers allege that the Gulf Big Three: Emirates, Qatar Airways and Abu Dhabi's Etihad have received government subsidies worth $40 billion. They accuse the Gulf three of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses and below-market labour costs that are considered unfair subsidies by the World Trade Organisation. "On this front, our position has always been clear: we embrace competition because it is good for the consumer industry and also us," he told reporters.
Emirates operates a fleet of 219 passenger aircraft and 14 freighters, serving 144 destinations in 81 countries. The airline operates the world's largest fleets of Airbus A380s and Boeing 777s. It has planes on order worth $135 billion. The carrier said Europe was the highest revenue contributing region with $6.9 billion, up seven percent from the previous year, followed by Asia and Australasia, which grew three percent to $6.7 billion. Revenue from the Americas jumped 20 percent to $3.0 billion.