Dubai-based Emirates Airline recorded a net profit of AED7.13 billion ($1.94 billion) for the 2015-16 financial year ended March 31, up 56.4% compared to a net profit of AED4.6 billion in the previous year. Profit margin was 8.4%, the strongest margin since 2010-11.
Revenue for the period dropped 4.3%, to AED85 billion, largely as a result of the strengthening US dollar against many currencies and downward pressure on prices caused by sharply reduced fuel prices. The rising greenback had an AED6 billion adverse impact on the airline’s revenue and an AED4.2 billion reduction in the carrier’s bottom line figures.
Despite this, however, operating costs dropped 7.5% to AED76.71 billion, largely because of a 31% reduction in the airline’s fuel bill, to AED19.7 billion. Fuel accounted for 26% of total expenses last year, compared to 35% in 2014-15.
Passenger numbers rose 8% to 51.9 million although, with a 13% rise in ASKs, load factor dropped 3.1% to 76.5% compared to the previous year. Other factors behind the drop in load factor were “lingering economic uncertainty and strong competition in many markets,” according to the airline.
Total passenger and cargo capacity rose over the year to 56.4 billion ATKs, up 11% on 2014-15.
Over the course of its financial year, the airline took on charge 29 new aircraft, comprising 12 Airbus A380s and 16 Boeing 777-300ERs (plus a single 777 freighter) and retired nine aircraft, giving the fleet an average age of 74 months.
Although this was a record number of new aircraft to be taken over the course of a year, Emirates chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum said this figure would be topped over the course of the coming year, with 36 new aircraft scheduled to be delivered and 26 older types to be phased out.
To fund fleet growth, the airline last year raised AED26.9 billion via a variety of financing initiatives.
The other component of the Emirates Group, dnata, which handles a portfolio of services including ground handling and catering, made its highest-ever net profit of AED1 billion on revenue of AED10.6 billion.
Al Maktoum said challenges for the coming year include the continuing strength of the dollar and low fuel prices, with the latter being a double-edged sword—good for the airline’s costs, but bad for yields.
Asked during a Q&A session when Emirates would be moving from Dubai International Airport to Al Maktoum International Airport, previously known as Dubai World Central, he replied: “I wish I knew the answer. I don’t think you will see Emirates moving before 2023.”
Passenger numbers at Dubai International are climbing steadily above the 70 million mark and the airport authority is taking a series of initiatives to make more efficient use of existing facilities there.
Al Maktoum International, which opened to passenger traffic in October 2013, has a single terminal with a capacity of only 5 million, expandable to 7 million passengers. However, long-term plans call for a $32 billion expansion plan: The first phase will see two satellite buildings with a capacity of 120 million passengers and the capacity to handle 100 Airbus A380s simultaneously. Ultimately, Al Maktoum will have an annual passenger capacity of 220 million.